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What changed in MEDIFAST INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MEDIFAST INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+303 added−321 removedSource: 10-K (2026-02-17) vs 10-K (2025-02-18)

Top changes in MEDIFAST INC's 2025 10-K

303 paragraphs added · 321 removed · 216 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

107 edited+61 added−58 removed51 unchanged
Biggest changeScientific Advisory Board Our Scientific Advisory Board consists of six multi-disciplinary, internationally recognized scientific experts who provide objective insights to guide the Company in making informed decisions based on the latest scientific developments in health and wellness and serve as the foundation for scientifically-valid, evidence-based, customer-centric, high-quality innovations by the Company for lasting health.
Biggest changeJanuary and February generally show sequential increases in sales, as these months are considered the commencement of the “diet season” and "resolution season." We believe, however, that our sales pattern does not necessarily follow the seasonality of our industry, but rather is predicated on the growth or contraction of our coach network. 11 Table of Contents Scientific Advisory Board Our Scientific Advisory Board consists of six multi-disciplinary, internationally recognized scientific experts who provide objective insights to guide the Company in making informed decisions based on the latest scientific developments in health and wellness and serve as the foundation for scientifically-valid, evidence-based, client-centric, high-quality innovations by the Company for lasting health.
For the Optimal Weight 5 & 1 Active Plan, we recommend up to 45 minutes of low to medium intensity exercise most days of the week and two servings of OPTA VIA ACTIVE EAA Blend to support muscle health and post workout recovery. • Optimal Weight 4 & 2 & 1 Plan ® & Optimal Weight 4 & 2 ACTIVE Plan ® .
For the 5 & 1 Active Plan, we recommend up to 45 minutes of low to medium intensity exercise most days of the week and two servings of OPTA VIA ACTIVE EAA Blend to support muscle health and post workout recovery. • Optimal Weight 4 & 2 & 1 Plan ® & Optimal Weight 4 & 2 ACTIVE Plan ® .
An inflationary economy could impact our cost structure and put pressure on consumer spending. Increases in commodity prices or food costs, including as a result of inflation, could affect the global and U.S. economies and could also adversely impact our business, financial condition, or results of operations.
An inflationary economy could impact our cost structure and put pressure on consumer spending. Increases in commodity prices or food costs, including as a result of inflation or tariffs, could affect the global and U.S. economies and could also adversely impact our business, financial condition, or results of operations.
Risk Factors. Product Liability and Insurance The Company, like other producers and distributors of ingested products, faces an inherent risk of exposure to product liability claims in the event that, among other things, the use of its products results in injury or death. The Company maintains insurance against product liability claims with respect to the products it manufactures.
Product Liability and Insurance The Company, like other producers and distributors of ingested products, faces an inherent risk of exposure to product liability claims in the event that, among other things, the use of its products results in injury or death. The Company maintains insurance against product liability claims with respect to the products it manufactures.
Recently, it became clear that medical weight loss solutions, such as GLP-1 medications, have become an increasingly key component of the overall health and wellness ecosystem, and the recent surging awareness and popularity of these weight loss medications serve as another major competitor, as these products have prompted a huge change in the way that consumers think about weight loss and lifestyle modification solutions in general.
Recently, it became clear that medical weight loss solutions, such as GLP-1 medications, have become an increasingly key component of the overall health and wellness ecosystem, and the recent surging acceptance and popularity of these weight loss medications serve as another major competitor, as these products have prompted a huge change in the way that consumers think about weight loss and lifestyle modification solutions in general.
We recognize that these weight loss medications have attracted significant attention from the market and pose a threat to our interactions with our traditional customer base. Importantly, the efficacy claims of GLP-1 medications for weight loss are based specifically on their incorporation of lifestyle changes that include a reduced calorie diet and increased physical activity.
We recognize that these weight loss medications have attracted significant attention from the market and pose a threat to our interactions with our traditional client base. Importantly, the efficacy claims of GLP-1 medications for weight loss are based specifically on their incorporation of lifestyle changes that include a reduced calorie diet and increased physical activity.
These include a wide variety of commercial weight loss programs, pharmaceutical products, surgical interventions, books, self-help diets, dietary meal replacements, and appetite suppressants as well as digital tools, app-based health and wellness monitoring solutions, and wearable trackers. The weight loss market is served by a diverse array of competitors.
These include a wide variety of commercial metabolic health and weight loss programs, medications, pharmaceutical products, surgical interventions, books, self-help diets, dietary meal replacements, and appetite suppressants as well as digital tools, app-based health and wellness monitoring solutions, and wearable trackers. The metabolic health and weight loss market is served by a diverse array of competitors.
Where applicable, we also review service provider PCI compliance annually. We use a variety of information security methods to protect confidential customer and corporate data against unauthorized access, including periodic network and website vulnerability/penetration testing. Network intrusion detection and prevention technologies are in use to alert and mitigate unauthorized access and distributed denial of service attacks.
Where applicable, we also review service provider PCI compliance annually. We use a variety of information security methods to protect confidential client and corporate data against unauthorized access, including periodic network and website vulnerability/penetration testing. Network intrusion detection and prevention technologies are in use to alert and mitigate unauthorized access and distributed denial of service attacks.
For example, in 2016, the FTC entered into a settlement with another direct selling/multi-level marketing company, requiring the company to modify its business model, including basing sales compensation and qualification only on sales to retail and preferred customers and on purchases by a distributor for personal consumption within allowable limits.
For example, in 2016, the FTC entered into a settlement with another direct selling/multi-level marketing company, requiring the company to modify its business model, including basing sales compensation and qualification only on sales to retail and preferred clients and on purchases by a distributor for personal consumption within allowable limits.
For the Optimal Weight 4 & 2 Active Plan, we recommend up to 60 minutes of exercise most days of the week and two servings of OPTA VIA Active EAA Blend to support muscle health and post workout recovery. • OPTA VIA Optimization Plan. The Optimization Plan is a personalized approach to help customers’ long-term weight management.
For the Optimal Weight 4 & 2 Active Plan, we recommend up to 60 minutes of exercise most days of the week and two servings of OPTA VIA Active EAA Blend to support muscle health and post workout recovery. • OPTA VIA Optimization Plan. The Optimization Plan is a personalized approach to help clients’ long-term weight management.
Governmental Regulation We are subject to extensive federal, state, and local government laws and regulations, including those relating to the preparation and sale of food and beverages, in the jurisdictions in which we operate, own, and lease properties, and market our offerings, including the OPTA VIA program, products, and other aspects of our business.
Governmental Regulation We are subject to extensive federal, state, and local government laws and regulations, including those relating to the preparation and sale of food and beverages, in the jurisdictions in which we operate, own, and lease properties, and market our offerings, including our program, products, and other aspects of our business.
As such, we will continue working in collaboration with coaches across all key markets to reach and acquire new customers, as well as reactivate lapsed customers, as we look to further our impact and advance the global health movement. Products and Programs We take pride in our scientific heritage.
As such, we will continue working in collaboration with coaches across all key markets to reach and acquire new clients, as well as reactivate lapsed clients, as we look to further our impact and advance the global health movement. Products and Programs We take pride in our scientific heritage.
We are also subject to laws governing our relationships with employees, including minimum wage requirements, overtime, working conditions, hiring and firing, non-discrimination for disabilities and other protected characteristics, work permits, and benefit offerings. Further, we are subject to laws governing our relationships with our independent contractor OPTA VIA coaches.
We are also subject to laws governing our relationships with employees, including minimum wage requirements, overtime, working conditions, hiring and firing, non-discrimination for disabilities and other protected characteristics, work permits, and benefit offerings. Further, we are subject to laws governing our relationships with our independent contractor coaches.
Our websites use commercially developed software which are hosted by data center colocation and cloud service providers. The hosting facilities provide carrier-diverse network connectivity, information security technologies, redundant and emergency power, fire prevention and control, and physical security.
Our websites use commercially developed software which is hosted by data center colocation and cloud service providers. The hosting facilities provide carrier-diverse network connectivity, information security technologies, redundant and emergency power, fire prevention and control, and physical security.
The new GLP-1 Nutrition Support Plan combines the effectiveness of the medication with balanced nutrition and lifestyle strategies to help customers lose weight, preserve lean muscle and support energy levels throughout their weight loss journey and into optimization.
The new GLP-1 Nutrition Support Plan combines the effectiveness of the medication with balanced nutrition and lifestyle strategies to help clients lose weight, preserve lean muscle and support energy levels throughout their weight loss journey and into optimization.
Our coaches are the key component of our marketing efforts and serve as important advocates of our plans and products. We have a history of launching new products and plans to our coach network first to ensure that we have support from the OPTA VIA community.
Our coaches are the key component of our marketing efforts and serve as important advocates of our plans and products. We have a history of launching new products and plans to our coach network first to ensure that we have support from the coach community.
Under this plan, OPTA VIA coaches guide their customers to eat three OPTA VIA ASCEND mini meals, one Lean & Green+ meal, and one multivitamin & mineral and omega-3 supplement from the OPTA VIA ASCEND daily nutrient pack.
Under this plan, coaches guide their clients to eat three OPTA VIA ASCEND mini meals, one Lean & Green+ meal, and one multivitamin & mineral and omega-3 supplement from the OPTA VIA ASCEND daily nutrient pack.
Several states have passed legislation that more clearly distinguishes between illegal pyramid schemes and legitimate multi-level marketing (“MLM”) business models. 12 Table of Contents Settlements between the FTC and other direct selling companies and guidance from the FTC have addressed inappropriate earnings and lifestyle claims and the importance of focusing on consumer sales.
Several states have passed legislation that more clearly distinguishes between illegal pyramid schemes and legitimate multi-level marketing (“MLM”) business models. Settlements between the FTC and other direct selling companies and guidance from the FTC have addressed inappropriate earnings and lifestyle claims and the importance of focusing on consumer sales.
Traditionally, the predisposition of customers refraining from initiating weight loss or management programs during the holiday season typically impacts the fourth quarter with fewer sales of weight management products and services during these months.
Traditionally, the predisposition of clients refraining from initiating weight loss or management programs during the holiday season typically impacts the fourth quarter with fewer sales of weight management products and services during these months.
The Optimal Weight 4 & 2 & 1 Plan is designed for customers who want to continue eating all food groups or want a flexible meal plan to help them achieve a healthy weight.
The Optimal Weight 4 & 2 & 1 Plan is designed for clients who want to continue eating all food groups or want a flexible meal plan to help them achieve a healthy weight.
If companies do not voluntarily modify practices identified by these reviewing entities, they may report the perceived violations to law enforcement agencies. Laws and regulations related to direct selling companies are generally intended to prevent fraudulent or deceptive schemes, including “pyramid” schemes, which compensate participants primarily for recruiting additional participants without significant emphasis on product sales to consumers.
If companies do not voluntarily modify practices identified by these reviewing entities, they may report the perceived violations to law enforcement agencies. 12 Table of Contents Laws and regulations related to direct selling companies are generally intended to prevent fraudulent or deceptive schemes, including “pyramid” schemes, which compensate participants primarily for recruiting additional participants without significant emphasis on product sales to consumers.
The FTC is also currently reviewing the Business Opportunity Rule, which requires business opportunity sellers to give prospective buyers specific information to help them evaluate a business opportunity or work-at-home program.
Finally, the FTC is currently reviewing the Business Opportunity Rule, which requires business opportunity sellers to give prospective buyers specific information to help them evaluate a business opportunity or work-at-home program.
Formulated to work with or without OPTA VIA nutrition plans, and guided by coach support, OPTA VIA ACTIVE is backed by science, made with no colors, flavors or sweeteners from artificial sources and is Informed Sport certified, a global standard in sports nutrition quality control that ensures its certified products contain no banned substances. • OPTA VIA ASCEND: OPTA VIA ASCEND mini meals deliver targeted nutrition that gives customers’ body what they need to succeed — whether losing weight on a GLP-1 medication or in weight management mode.
Formulated to work with or without our nutrition plans, and guided by coach support, OPTA VIA ACTIVE is backed by science, made with no colors, flavors or sweeteners from artificial sources and is Informed Sport certified, a global standard in sports nutrition quality control that ensures its certified products contain no banned substances. • OPTA VIA ASCEND: OPTA VIA ASCEND mini meals deliver targeted nutrition that gives clients’ bodies what they need to succeed — whether losing weight on a GLP-1 medication or in weight management mode.
Under this plan, OPTA VIA coaches guide their customers to eat two OPTA VIA ASCEND mini meals, two Lean & Green+ meals, two or more healthy exchanges (food options around 100 calories and 15 grams of carbs or less) based on the customers energy level, and one multivitamin & mineral and omega-3 supplement from the OPTA VIA ASCEND daily nutrient pack. 10 Table of Contents • OPTA VIA GLP-1 Nutrition Support Plan : The perfect nutritional companion to GLP-1 medications, allowing customers to focus on their weight loss without the stress of figuring out what to eat.
Under this plan, coaches guide their clients to eat two OPTA VIA ASCEND mini meals, two Lean & Green+ meals, two or more healthy exchanges (food options around 100 calories and 15 grams of carbs or less) based on the clients energy level, and one multivitamin & mineral and omega-3 supplement from the OPTA VIA ASCEND daily nutrient pack. • OPTA VIA GLP-1 Nutrition Support Plan : The perfect nutritional companion to GLP-1 medications, allowing clients to focus on their weight loss without the stress of figuring out what to eat.
Macroeconomic Conditions Certain global economic challenges, including the impact of inflation, have caused macroeconomic uncertainty and volatility in markets where we, our suppliers, and our OPTA VIA coaches operate. Like many product-focused companies, we are exposed to market risks from changes in commodity or other raw material prices.
Macroeconomic Conditions Certain global economic challenges, including the impact of inflation or tariffs, have caused macroeconomic uncertainty and volatility in markets where we, our suppliers, and our independent coaches operate. Like many product-focused companies, we are exposed to market risks from changes in commodity or other raw material prices.
No matter what plan a customer is on, they can learn healthy habits through the Habits of Health Transformational System, which is a crucial tool for customer success and provides the foundation for our community to learn and adopt healthy habits.
No matter what plan a client is on, they can learn healthy habits through the Habits of Health Transformational System, which is a crucial tool for client success and provides the foundation for our coach community to learn and adopt healthy habits.
In 2024, the FTC issued a Report on Multi-Level Marketing Income Disclosures (“IDS Report”), which outlined findings from the FTC Staff’s review of the public income disclosure statements of seventy different multi-level marketing companies, including OPTAVIA.
In 2024, the FTC issued a Report on Multi-Level Marketing Income Disclosures (“IDS Report”), which outlined findings from the FTC Staff’s review of the public income disclosure statements of seventy different multi-level marketing companies, including OPTA VIA.
The plan builds on the principles that led to customers’ weight loss success, combining lifestyle strategies, balanced nutrition, exercise guidance, and ongoing coach support to help customers stay at their goal weight and enjoy life to the fullest. This plan equips customers with the tools to confidently help them keep the weight off.
The plan builds on the principles that led to clients’ weight loss success, combining lifestyle strategies, balanced nutrition, exercise guidance, and ongoing coach support to help clients stay at their goal weight and enjoy life to the fullest. This plan equips clients with the tools to confidently help them keep the weight off.
If direct sellers become subject to the rule, we will have to comply with the rule, which could impact our business and cause us to modify how we currently operate. 13 Table of Contents We continue to monitor developments to assess whether we should make any changes to our business or compensation plan.
If direct sellers become subject to the rule, we will have to comply with the rule, which could impact our business and cause us to modify how we currently operate. We continue to monitor developments to assess whether we should make any changes to our business or compensation plan.
In turn, our coaches better understand our products and their benefits and can best meet customers where they are in their weight loss journey. It is integral to our business that this coach network has the tools to effectively lead our marking approach.
In turn, our coaches better understand our products and their benefits and can best meet clients where they are in their weight loss journey. It is integral to our business that this coach network has the tools to effectively lead our marketing approach.
While OPTAVIA believes its practices with regard to its income disclosure statement comply with current laws, we cannot be sure that the FTC will not investigate and potentially challenge our income disclosure practices in the future. Finally, the FTC is currently considering certain legal and regulatory changes that, if implemented, could impact our business.
While OPTA VIA believes its practices with regard to its income disclosure statement comply with current laws, we cannot be sure that the FTC will not investigate and potentially challenge our income disclosure practices in the future. The FTC is also currently considering certain legal and regulatory changes that, if implemented, could impact our business.
Wellness is not just what we do, it’s who we are, and our commitment to being a best-in-class wellness company starts with providing team members equal access to all our programs and products. Our Employees on Plan program allows our team members to experience the support of a coach, as they tackle their own weight loss journey.
Wellness is not just what we do, it’s who we are, and our commitment to being a best-in-class wellness company starts with providing team members equal access to all our programs and products. Our Employees on Plan program allows our team members to experience the support of a coach as they tackle their own journey toward optimal health and well-being.
The Habits of Health Transformational System is an innovative, mind and body lifestyle approach that encourages and educates customers to replace unhealthy habits with healthy ones that contribute to their long-term success. Incentives From time to time we offer economic incentives designed to support each OPTA VIA coach’s and customer’s success.
The Habits of Health Transformational System is an innovative, mind and body lifestyle approach that encourages and educates clients to replace unhealthy habits with healthy ones that contribute to their long-term success. Incentives From time to time we offer economic incentives designed to support each coach’s success.
In 2024, we won the highest-level Well Workplace Award, Platinum, from the Wellness Council of America, as well as the 2024 Gold Workplace Well-being Award for Making a Difference from Aetna, and was recognized at the Exemplar level by Healthiest Maryland Businesses. In addition to our team members, our Human Capital also includes our independent contractor OPTA VIA coaches.
In 2024 and 2025, we won the highest-level Well Workplace Award, Platinum, from the Wellness Council of America, as well as the Gold Workplace Well-being Award for Making a Difference from Aetna, and the Exemplar level by Healthiest Maryland Businesses. In addition to our team members, our Human Capital also includes our independent contractor coaches.
Potential customers seeking to manage their weight can turn to traditional center-based competitors, online diet-oriented sites, self-directed dieting and self-administered products such as prescription medications, over-the-counter medications and supplements, as well as medically supervised programs.
Potential clients seeking to manage their metabolic health or weight can turn to traditional center-based competitors, online diet-oriented sites, self-directed dieting and self-administered products such as prescription medications, over-the-counter medications and supplements, as well as medically supervised programs.
We offer customers incentives to join the OPTA VIA community, including access to the corporate “Nutrition Support” team made up of subject matter experts that provide assistance to our coaches and customers, and exclusive offers through OPTA VIA Premier, our auto-ship service that helps our customers stay on plan, as well as qualifies them for discounts on purchased products and free or discounted shipping.
We offer clients incentives to join our coach community, including access to the corporate “Nutrition Support” team made up of subject matter experts that provide assistance to our coaches and clients, and exclusive offers through Premier+, our auto-ship service that helps our clients stay on plan, as well as qualifies them for discounts on purchased products and discounted shipping.
Our variable cost structure can be utilized to adapt to changing market conditions with potential actions including adjustments to our manufacturing, distribution, and customer support infrastructure. As a response, we may periodically take incremental pricing actions to offset supply chain costs and inflationary pressures.
Our variable cost structure can be utilized to adapt to changing market conditions with potential actions including adjustments to our manufacturing, distribution, and client support infrastructure. As a response, we may periodically take incremental pricing actions to offset supply chain costs, increases in tariff-related costs, and inflationary pressures.
While OPTAVIA has taken steps to educate our employees and coaches on proper earnings claims, if an employee or coach makes improper claims or if regulators issue new rules or change current guidance or determine we (or our coaches) are making any improper claims, this could lead to an FTC investigation and could harm our business.
While OPTA VIA has taken steps to educate our employees and coaches on proper 13 Table of Contents earnings claims, if an employee or coach makes improper claims or if regulators issue new rules or change current guidance or determine we (or our coaches) are making any improper claims, this could lead to an FTC investigation and could harm our business.
The OPTA VIA brand has impacted more than 3 million lives with a simple yet comprehensive solution that gives every customer access to: • A personal (human, not AI) coach who has been in their shoes (about 90% were clients first) • A community of others on similar journeys • Healthy habit blueprint • Tailored nutrition plans • Nutrient-dense products • A mobile app with hundreds of healthy recipes, habit trackers and other tools all in one place OPTA VIA offers a range of nutrition plans tailored to help customers achieve their unique goals.
Our program has impacted more than 3 million lives with a simple yet comprehensive solution that gives every client access to: • A personal (human, not AI) coach who has been in their shoes (about 90% were clients first) • A community of others on similar journeys • Healthy habit blueprint • Tailored nutrition plans • Nutrient-dense products • A mobile app with hundreds of healthy recipes, habit trackers and other tools all in one place We offer a range of nutrition plans tailored to help clients achieve their unique goals.
Our culture narrative is fully embedded in our core human capital processes to ensure our team members understand how their success translates to the success of the greater team and ultimately to an amazing coach and customer experience.
Our culture narrative is fully embedded in our core human capital processes to ensure our team members understand how their success contributes to the success of the broader team, and ultimately to an amazing coach and client experience.
Customer acquisition and retention efforts are designed to attract new customers by emphasizing OPTA VIA’s holistic and effective solutions, including its ability to support those pursuing traditional weight loss through healthy lifestyle changes, individuals using GLP-1 medications, and those transitioning off such medications.
Client acquisition and retention efforts are designed to attract new clients by emphasizing the Company's holistic and effective solutions, including its ability to support those pursuing traditional weight loss through healthy lifestyle changes, individuals using GLP-1 medications, and those transitioning off such medications.
We also compete with other direct-selling organizations, some of which have a longer operating history and greater visibility, name recognition and financial resources than we do. We also believe we have advantages over traditional direct selling companies: • OPTA VIA’s innovative model is customer-centric, with one sales price for both OPTA VIA coaches and customers.
We also compete with other direct-selling organizations, some of which have a longer operating history and greater visibility, name recognition and financial resources than we do. We also believe we have advantages over traditional direct selling companies. Our model: • Is client-centric, with one sales price for both coaches and clients.
OPTA VIA offers an entrepreneurial opportunity that allows coaches: • to start, manage and grow their own business with minimal upfront capital investment; • the ability to earn supplemental income; • the ability to enjoy a work-life balance; • the opportunity to market products they believe in; and • the opportunity to complement other business pursuits.
June 2023. 8 Table of Contents Our business offers an entrepreneurial opportunity that allows coaches: • to start, manage and grow their own business with minimal upfront capital investment; • the ability to earn supplemental income; • the ability to enjoy a work-life balance; • the opportunity to market products they believe in; and • the opportunity to complement other business pursuits.
Our Wellness Committee oversees a host of programming throughout the year to integrate healthy habits into the lives of our team members, such as incentives through LiveWell, for taking on a step challenge, doing a biometric screening or attending a wellness event among other activities.
Our Wellness Committee oversees a host of programming throughout the year to integrate healthy habits into the lives of our team members, such as incentives through our wellness platform, LiveWell, for taking on a step challenge, doing a biometric 16 Table of Contents screening or attending a wellness event, among other activities. Our wellness efforts have been recognized externally.
OPTA VIA coaches guide their customers on which Fuelings to select, and on how to develop healthy habits, such as preparing lean and green meals and choosing healthy snacks.
Our coaches guide their clients on which Fuelings to select, and on how to develop healthy habits, such as preparing lean and green meals and choosing healthy snacks.
The work of this cross-disciplinary group builds on our scientific heritage and incorporates leading-edge clinical research into the development of our products, plans and programs. 11 Table of Contents Marketing We continue to develop the OPTA VIA brand through comprehensive marketing strategies that reflect the changing dynamics of the weight loss and wellness markets.
The work of this cross-disciplinary group builds on our scientific heritage and incorporates leading-edge clinical research into the development of our products, plans and programs. Marketing We continue to market our products through comprehensive strategies that reflect the changing dynamics of the weight loss, wellness, and metabolic health markets.
Each year we host a program called Coach Encounters, which gives our team members an opportunity to hear directly from our inspiring coaches about their personal journeys as well as how our company supports their work in seeking positive health outcomes for our customers. In 2024, we were once again recognized by U.S.
Each year we host a program called Coach Encounters, which gives our team members an opportunity to hear directly from our inspiring coaches about their personal journeys as well as how our Company supports their work in seeking positive health outcomes for our clients.
Industry growth is also being driven by growing consumer awareness and increasing demand for health and wellness products. The intensified interest in physical fitness, fitness center membership, increased public awareness and incidences of chronic diseases such as type 2 diabetes, heart disease, certain types of cancer, stroke, arthritis, sleep apnea, and depression have increased demand for health and wellness products.
The intensified interest in physical fitness, fitness center membership, increased public awareness and incidences of chronic diseases such as type 2 diabetes, heart disease, certain types of cancer, stroke, arthritis, sleep apnea, and depression have increased demand for health and wellness products.
Under this plan, OPTA VIA coaches guide their customers to eat four meals of OPTA VIA Fuelings and prepare two lean and green meals and one healthy snack themselves.
Under this plan, coaches guide their clients to eat four meals of OPTA VIA Fuelings and prepare two 10 Table of Contents lean and green meals and one healthy snack.
The Company’s team of researchers, food scientists, nutritionists, and other scientific experts, led the development of OPTA VIA ACTIVE EAA Blend and OPTA VIA ACTIVE Whey Protein, which are designed to address age-related muscle mass decline and support overall muscle health.
The Company’s team of researchers, food scientists, nutritionists, and other scientific experts, led the development of these products, which are designed to address age-related muscle mass decline and support overall muscle health.
We believe our business is most successful when our coaches can maintain a continuous cycle of growth: coaches activate new and successful customers, many of whom go on to become OPTA VIA coaches themselves, who activate new customers, and so on.
We believe our business is most successful when our coaches can maintain a continuous cycle of growth. Historically, coaches have activated new and successful clients, many of whom went on to become coaches themselves, who activate new clients, and so on.
The lifestyle solution is designed for real life and built around four key components: • Independent Coaches: Independent OPTA VIA coaches provide individualized support and guidance to customers on the path to optimal health and wellbeing. • OPTA VIA Community: A community of like-minded people providing each other with real-time connection and support. • The Habits of Health ® Transformational System: A proprietary system that offers easy steps to a sustainable healthy lifestyle. • Products & Plans: Clinically proven plans and scientifically developed products, backed by dietitians, scientists and physicians.
The metabolic health system is designed for real life and built around four key components: • Independent Coaches: Coaches provide individualized support and guidance to clients on their path to optimal health and well-being. • Community: A community of like-minded individuals offers real-time connection and support. • The Habits of Health Transformational System: A proprietary system that provides easy steps toward a sustainable healthy lifestyle. • Products & Plans: Clinically proven plans and scientifically developed products, backed by dietitians, scientists, and physicians.
There is no tiered pricing. • OPTA VIA boasts a health and wellness community, which promotes a holistic health and wellness program and is not focused solely on product sales. • OPTA VIA offers a differentiated direct-to-consumer model, with 100% of products shipped directly to customers. • The field promotes a unified Habits of Health training system that aligns its leaders around a common mission of Lifelong Transformation, Making a Healthy Lifestyle Second Nature.
There is no tiered pricing. • Incorporates coach support, with personalized coach support serving as a key differentiator to our model. • Is comprehensive, including nutritional products and support. • Boasts a health and wellness community, which promotes a holistic health and wellness program and is not focused solely on product sales. • Offers a differentiated direct-to-consumer model, with 100% of products shipped directly to clients. • Promotes a unified Habits of Health training system that aligns its coach leaders around a common mission of Lifelong Transformation, Making a Healthy Lifestyle Second Nature.
As a result, under Medifast’s OPTA VIA offering, weight loss medications are another important element in overall tailored lifestyle plans that also include coaching, community support, nutritionally balanced meals, and exercise. We believe we have a competitive advantage over traditional diet companies.
As a result, under Medifast’s offerings, weight loss medications can be an important element that fits into the overall tailored lifestyle plans that also include coaching, community support, nutritionally balanced meals, and exercise. We believe we have a competitive advantage over traditional diet companies.
They support our customers and market our products and services primarily through word of mouth, email and via social media channels such as Facebook, Instagram, X, and video conferencing platforms. The more OPTA VIA coaches we have, the more customers we can serve.
They support our clients and market our products and services primarily through word of mouth, email and via social media channels such as Facebook, Instagram, X and video conferencing platforms. The more coaches we have, the more clients we can serve. The total number of actively earning coaches as of December 31, 2025, was 16,100.
Within our supply chain, we have continued our Level Up shadow program, which creates opportunities for our supply chain team members to be cross trained in other areas of the supply chain and learn new skills. This program fosters greater sponsorship of junior talent and an increase of internal mobility.
Within our supply chain, we have continued our Level Up shadow program, which creates opportunities for our supply chain team members to be cross-trained in other areas of the supply chain and develop new skills.
We have authored over 73 peer-reviewed scientific abstracts and publications, 36 scientific journal publications and 28 completed research studies.
We have authored over 103 peer-reviewed scientific abstracts and publications, 44 scientific journal publications and 33 completed research studies.
The OPTA VIA model: 6 Table of Contents • Offers a solution that focuses on holistic wellness; it views healthy weight as a catalyst to greater changes and has impacted more than 3 million lives. • Provides personalized, empathetic support from coaches who have been in their customers’ shoes. • Promotes lifelong habit development supported by a proprietary integrated approach to behavior change, the Habits of Health Transformational System. • Encompasses a vibrant health and wellness community.
Our model: • Offers a solution that focuses on metabolic health powered by a breakthrough approach and human coaching and has impacted more than 3 million lives. • Provides personalized, empathetic support from coaches who have been in their clients' shoes. • Promotes lifelong habit development supported by a proprietary integrated approach to behavior change, the Habits of Health Transformational System. • Encompasses a vibrant health and wellness community.
ITEM 1. BUSINESS SUMMARY Medifast, Inc. (“Medifast,” the “Company,” “we” or “us”) is the health and wellness company known for its habit-based and coach-guided lifestyle solution, OPTA VIA ® .
ITEM 1. BUSINESS SUMMARY Medifast, Inc. (“Medifast,” the “Company,” “we” or “us”) is the 40+ year old health and wellness company known for its science-backed, coach-guided lifestyle system.
OPTA VIA Essential Amino Acid (EAAs) Blend and OPTA VIA ACTIVE Whey Protein are designed to help new and existing customers of all fitness levels optimize their motion habits.
Clients purchase kits tailored to their individual needs on the advice and guidance of their coach. • OPTA VIA ACTIVE . OPTA VIA Essential Amino Acid (EAAs) Blend and OPTA VIA ACTIVE Whey Protein are designed to help new and existing clients of all fitness levels optimize their motion habits.
In 2024, we conducted two cycles of our listening initiative, The Loop, which promotes communication transparency, empowers our team leaders to review their employee engagement results and facilitates candid conversations to shape and improve the work experience.
Diversity is one of Medifast’s Core Values. In 2025, we continued bi-annual cycles of our listening initiative, The Loop, which promotes transparency, empowers our team leaders to review their employee engagement results and facilitates candid conversations to shape and improve the work experience.
The total number of active earning OPTA VIA coaches as of December 31, 2024 was 27,100. 16 Table of Contents Information Systems & Technology We have adopted a cybersecurity framework that, where appropriate, aligns with the National Institute of Standards and Technology's ("NIST") Cybersecurity Framework, and we have maintained systems that, where appropriate, are Payment Card Industry Data Security Standard compliant ("PCI") under current standards.
Information Systems & Technology We have adopted a cybersecurity framework that, where appropriate, aligns with the National Institute of Standards and Technology's ("NIST") Cybersecurity Framework, and we have maintained systems that, where appropriate, are Payment Card Industry Data Security Standard compliant ("PCI") under current standards.
We see very strong participation in our #Acedit program with a 93% activation rate and 65% actively using the tool on a monthly basis. Our #AcedIt platform also supports our wellness program, LiveWell, to incentivize greater focus on our team members’ health and wellness. In 2024, we saw strong engagement with LiveWell with over 85% of employees leveraging the tool.
We see very strong participation in our #Acedit program with over 90% participation in 2025. Our #AcedIt platform also supports our wellness program, LiveWell, to incentivize greater focus on our team members’ health and wellness. In 2025, we saw strong engagement with LiveWell with over 93% of employees leveraging the tool and over 2,000 preventive health challenges completed.
Findings also showed most individuals interested in weight loss medications are looking for support beyond prescriptions, including clarity on how to incorporate components of healthy living, such as proper nutrition and exercise, into their lifestyles while utilizing these medical solutions 9 .
Findings also showed most individuals interested in weight loss medications are looking for support beyond prescriptions, including clarity on how to incorporate components of healthy living, such as proper nutrition and exercise, into their lifestyles while utilizing these medical solutions. 11 Direct Sellers Our business model combines the most powerful aspects of direct selling, while eliminating those dimensions that have typically challenged other companies.
The Company does not buy products from suppliers who do not maintain such coverage. Working Capital Practices We maintain sufficient amounts of inventory in stock in order to provide a high level of service to our customers.
The Company does not buy products from suppliers who do not maintain such coverage. 14 Table of Contents Working Capital Practices We maintain sufficient amounts of inventory in stock in order to provide a high level of service to our clients. Substantial inventories are required to meet the needs of our dual role as manufacturer and distributor.
Our Fuelings contain high-quality protein which helps our customers retain lean muscle mass and contain the patented probiotic BC30™ to support digestive health as part of a balanced diet and healthy lifestyle.
Products • OPTA VIA Fuelings . OPTA VIA Fuelings contain 24 vitamins and minerals, high quality, complete protein, and no colors, flavors or sweeteners from artificial sources. Our Fuelings contain high-quality protein which helps our clients retain lean muscle mass and contain the patented probiotic BC30™ to support digestive health as part of a balanced diet and healthy lifestyle.
April 2023. 7 Table of Contents • triggers that cause chronic “emotional eating” or “comfort eating”; • lack of knowledge or understanding about the impact of certain foods on their bodies and overall health; • lack of knowledge or understanding about healthy eating and proper hydration; • the role of physical activity and life-style behavior modification to support healthy habit creation; • the role of proper nutrition and lifestyle to augment their weight loss medication; • the need for a convenient and simple, healthy lifestyle solution or program to address their health and wellbeing goals and accommodate demands on their time; and • the need for a community of like-minded people for support to achieve their goals.
Lifestyle issues our clients often seek to address and resolve include: • physical limitations and chronic diseases linked to an unhealthy weight; • the desire for more energy to meet physical demands and aspirations (e.g. work, parenting, sports and recreation); • mental, emotional and psychological limitations caused by metabolic dysfunction; • triggers that cause chronic “emotional eating” or “comfort eating”; • lack of knowledge or understanding about the impact of certain foods on their bodies and metabolic health; • lack of knowledge or understanding about healthy eating and proper hydration; • the role of physical activity and life-style behavior modification to support healthy habit creation; • the role of proper nutrition and lifestyle to augment their weight loss medication; • the need for a convenient and simple, healthy lifestyle solution or program to address their health and wellbeing goals and accommodate demands on their time; and • the need for a community of like-minded people for support to achieve their goals.
OPTA VIA's lifestyle plans deliver proven health benefits as well as evidence-based tools, including scientifically developed products and a framework for habit creation reinforced by independent coaches and community support. We continue to innovate and build upon our scientific and clinical heritage to fulfill our mission of offering Lifelong Transformation, Making a Healthy Lifestyle Second Nature™.
Our scientifically developed products and habit creation framework, reinforced by coaches and community support, provide proven health benefits and serve as a promising foundation to develop a comprehensive metabolic health system. We continuously innovate and build upon our scientific and clinical heritage to fulfill our mission of Lifelong Transformation, Making a Healthy Lifestyle Second Nature ® .
Customers Sales are made to individual customers. No single customer accounted for 10% or more of our consolidated revenue for the year ended December 31, 2024. Seasonality Demand for weight management products and programs throughout the industry are typically seasonal.
We are consistently adapting and focusing our efforts on where we believe they will have the most impact. Customers Sales are made to individual customers. No single customer accounted for 10% or more of our consolidated revenue for the year ended December 31, 2025. Seasonality Demand for products and programs within our industry is typically seasonal.
We are focused on attracting and retaining top talent who are eager to participate in our mission. Our Total Rewards Program is intended to deliver competitive compensation and benefits that align with our company mission and values. Annually, we review our market reference ranges and pay to ensure we remain competitive, consistent, and equitable.
Our Total Rewards Program is intended to deliver competitive compensation and benefits that align with our Company's mission and values. Annually, we review our market reference ranges and pay to ensure we remain competitive, consistent and equitable. Our variable pay targets are performance-based and tied to organizational results.
We are investing substantial time and resources in carefully learning from our existing and prospective customers, listening to what our coaches are hearing and finding efficient solutions to challenges, along with building programs that deliver connection, engagement and retention. We are consistently adapting and focusing our efforts on where we believe they will have the most impact.
As we enter 2026, we are moving from transformation to execution and we are investing substantial time and resources in carefully learning from our existing and prospective clients, listening to what our coaches are hearing and finding efficient solutions to challenges, along with building programs that deliver connection, engagement and retention.
The Company incurred approximately $22.9 million in company led marketing expenses for the year ended December 31, 2024. Manufacturing Jason Pharmaceuticals, Inc., our wholly-owned subsidiary with a manufacturing facility in Owings Mills, Maryland, manufactures our products, and accounts for approximately 40% of our total unit sales. We purchased the facility in July 2002.
To supplement our coach-driven efforts, we also leverage from time-to-time Company-led marketing campaigns to drive client adoption. Manufacturing Jason Pharmaceuticals, Inc., our wholly-owned subsidiary with a manufacturing facility in Owings Mills, Maryland, manufactures our products, and accounts for approximately 40% of our total unit sales. We purchased the facility in July 2002.
Medifast offers a simple, yet comprehensive approach to achieving optimal health and wellbeing. Our lifestyle program, OPTA VIA, empowers people to make lasting changes. Through the support of our independent OPTA VIA coaches, about 90% of whom were customers first, our customers are guided through every step of their wellness journey.
The Company offers a simple, yet comprehensive approach to achieving optimal metabolic health and well-being by empowering individuals to make lasting changes. Through the dedicated support of our coaches, approximately 90% of whom were clients first, our clients are guided through every step of their wellness journey.
Obesity is defined as a Body Mass Index (“BMI”) of 30 kg/m 2 or greater, whereas overweight is defined as a BMI ranging between 25 and 29.9 kg/m 2 . Nearly three-quarters of U.S. adults are classified as overweight or obese, and between August 2021 and August 2023 more than 40% were classified as obese 5 .
Obesity is defined as a Body Mass Index (“BMI”) of 30 kg/m 2 or greater, whereas overweight is defined as a BMI ranging between 25 and 29.9 kg/m 2 .
Many have tried weight loss programs previously but have been unsuccessful at managing a healthy weight and embracing healthy habits for the long-term.
Consumer Motivation Our core clients are highly motivated to adopt a healthy lifestyle that is transformative and sustainable. Many have tried weight loss programs previously but have been unsuccessful at managing a healthy weight and embracing healthy habits for the long-term.
Five daily meals are OPTA VIA Fuelings, offering customers a choice from more than 45 delicious, convenient, nutritionally interchangeable, scientifically-designed products, including shakes, soups, bars, hot beverages, hearty choices, pudding and brownies.
The 5 & 1 Plan (targeted reset) encourages clients to eat six small meals a day, an important habit that helps clients reset their metabolism at the source. Five daily meals are OPTA VIA Fuelings, offering clients a choice from more than 45 delicious, convenient, nutritionally interchangeable, scientifically-designed products, including shakes, soups, bars, hot beverages, hearty choices, pudding and brownies.
Customer acquisition is important to our growth as customer cohorts utilizing the OPTA VIA program today form future coach cohorts, which in turn drive optimization of the customer and coach tenure mix and the associated improvements in efficiency and productivity. Optimizing incentivization and compensation remains important to drive growth, retention, and engagement.
Once a coach has successfully attracted a new client, the coach uses personalized coaching and effective digital tools to drive engagement. Client acquisition is important to our growth as client cohorts utilizing our program today form future coach cohorts, which in turn drive optimization of the client and coach tenure mix and the associated improvements in efficiency and productivity.
In response to changing macroeconomic conditions, the Company may take further actions that alter its business operations as may be required by governmental authorities, or that are determined to be in the best interests of employees, OPTA VIA coaches and customers, and stockholders. These macroeconomic uncertainties make it challenging for our management to estimate our future business performance.
In response to changing macroeconomic conditions, the Company may take further actions that alter its business operations as may be required by governmental authorities, or that are determined to be in the best interests of employees, coaches, and clients, and stockholders. Our ability to effectively navigate these developments is critical to maintaining operational resilience and achieving our long-term strategic objectives.
Adults are Now Overweight or Obese; NCHS Data Brief No. 508, September 2024, Obesity and Severe Obseity Prevalence in Adults: United States, August 2021 - August 2023 8 Table of Contents OPTA VIA coaches are focused on word of mouth and social media marketing toward increasingly younger demographics, reaching out to important and increasingly diverse communities of health and wellness consumers, and identifying and marketing to consumers who are in varying stages of optimal well-being.
Coaches are focused on word of mouth and social media marketing toward increasingly younger demographics, reaching out to important and increasingly diverse communities of health and wellness consumers, and identifying and marketing to consumers who are in varying stages of optimal well-being.
Our variable pay targets are performance based and tied to organizational results. As of December 31, 2024, we employed 504 team members, all employed in the United States, of whom 229 were engaged in manufacturing, logistics, and supply chain support, and 275 in marketing, administrative, and corporate support functions.
As of December 31, 2025, we employed 380 team members, all employed in the United States, of whom 173 were engaged in manufacturing, logistics and supply chain support, and 207 in marketing, administrative and corporate support functions. None of our team members are subject to a collective bargaining agreement with the Company.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeNegative or false commentary about us may be posted on social media platforms or similar devices at any time and may harm our business, brand, reputation, coaches, financial condition, and results of operations, regardless of the information’s accuracy.
Biggest changeNegative or false commentary about us may be posted on social media platforms or similar devices at any time and may harm our business, brand, reputation, coaches, financial condition, and results of operations, regardless of the information’s accuracy. 19 Table of Contents An increase in the use of social media for product promotion and marketing may cause an increase in the burden on us to monitor compliance of such materials and increase the risk that such materials could contain problematic product or marketing claims in violation of applicable regulations.
We may also be subject to claims that our products contain contaminants, are improperly labeled, include inadequate instructions as to use or inadequate warnings covering interactions with other substances. Additionally, the manufacture and sale of these products involves the risk of injury to consumers due to tampering by unauthorized third parties or product contamination.
We may also be subject to claims that our products contain contaminants, are improperly labeled, include inadequate instructions as to use, or include inadequate warnings covering interactions with other substances. Additionally, the manufacture and sale of these products involves the risk of injury to consumers due to tampering by unauthorized third parties or product contamination.
The popularity of weight management programs is dependent, in part, on their ease of use, cost and channels of distribution as well as consumer trends, which continue to evolve with the introduction of new technologies and innovations, and, on an ongoing basis, many existing and potential providers of weight loss solutions, 24 Table of Contents including many pharmaceutical firms with significantly greater financial and operating resources than we have, are developing new products and services.
The popularity of weight management programs is dependent, in part, on their ease of use, cost and channels of distribution as well as consumer trends, which continue to evolve with the 24 Table of Contents introduction of new technologies and innovations, and, on an ongoing basis, many existing and potential providers of metabolic health and weight loss solutions, including many pharmaceutical firms with significantly greater financial and operating resources than we have, are developing new products and services.
If we are unable to obtain a sufficient quantity, quality and variety of foods and other products from these manufactures in a timely and low-cost manner, we will be unable to fulfill our customers’ orders in a timely manner, which may cause us to lose revenue and market share or incur higher costs, as well as damage our reputation and the value of our brands.
If we are unable to obtain a sufficient quantity, quality and variety of foods and other products from these manufactures in a timely and low-cost manner, we will be unable to fulfill our clients’ orders in a timely manner, which may cause us to lose revenue and market share or incur higher costs, as well as damage our reputation and the value of our brands.
Further, customers who allege that they were deceived by any statements that we made in advertising or labeling could bring a lawsuit against us under consumer protection laws. From time-to-time we are subject to such allegations and have been involved in such litigation. We may ultimately be unsuccessful in defending ourselves against such claims.
Further, clients who allege that they were deceived by any statements that we made in advertising or labeling could bring a lawsuit against us under consumer protection laws. From time-to-time we are subject to such allegations and have been involved in such litigation. We may ultimately be unsuccessful in defending ourselves against such claims.
In addition, perceived uncertainties as to our future direction, strategy or leadership created as a consequence of activist stockholder initiatives may result in the loss of potential business opportunities, harm our ability to attract new investors, customers, employees, suppliers and other strategic partners, and cause our share price to experience periods of volatility or stagnation.
In addition, perceived uncertainties as to our future direction, strategy or leadership created as a consequence of activist stockholder initiatives may result in the loss of potential business opportunities, harm our ability to attract new investors, clients, employees, suppliers and other strategic partners, and cause our share price to experience periods of volatility or stagnation.
These include: potential misconduct or improper claims by OPTA VIA coaches; negative public perceptions of multi-level marketing; general economic conditions; failure to develop innovative products to meet consumer demands; adverse opinions of our products, services, or industry; and regulatory actions against our Company, competitors in our industry, or other direct selling companies.
These include: potential misconduct or improper claims by coaches; negative public perceptions of multi-level marketing; general economic conditions; failure to develop innovative products to meet consumer demands; adverse opinions of our products, services, or industry; and regulatory actions against our Company, competitors in our industry, or other direct selling companies.
Consequently, any future expansion of our international operations may require changes to the ways we collect and use consumer information. In the ordinary course of our business, we collect and utilize proprietary and customer information and data. As a result, we have developed systems that are designed to protect consumer information and prevent fraudulent transactions and other security breaches.
Consequently, any future expansion of our international operations may require changes to the ways we collect and use consumer information. In the ordinary course of our business, we collect and utilize proprietary and client information and data. As a result, we have developed systems that are designed to protect consumer information and prevent fraudulent transactions and other security breaches.
Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties. Risks Related to Our Business The weight management industry is highly competitive and the development and acceptance of weight-loss medicines and other products could result in decreased demand for our services and products.
Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties. Risks Related to Our Business The metabolic health and weight management industry is highly competitive and the development and acceptance of weight-loss medicines and other products could result in decreased demand for our services and products.
We may not be successful in developing, introducing on a timely basis or marketing any new or enhanced products, and we cannot assure you that any new or enhanced products will appeal to the market. Our results of operations are highly dependent on the number of product sales generated by our OPTA VIA coaches.
We may not be successful in developing, introducing on a timely basis or marketing any new or enhanced products, and we cannot assure you that any new or enhanced products will appeal to the market. Our results of operations are highly dependent on the number of product sales generated by our coaches.
As a result, there can be no assurance that our OPTA VIA coaches will comply with our policies and procedures. Additionally, most of our OPTA VIA coaches do not have extensive training or certification in nutrition, diet or health fields and have only undergone the education they receive from us.
As a result, there can be no assurance that our coaches will comply with our policies and procedures. Additionally, most of our coaches do not have extensive training or certification in nutrition, diet or health fields and have only undergone the education they receive from us.
Because of our dependence on consumer perceptions, adverse publicity associated with illness or other undesirable effects resulting from the consumption of our products or similar products by competitors, whether or not accurate, could also damage customer confidence in our weight loss program and result in a decline in revenue.
Because of our dependence on consumer perceptions, adverse publicity associated with illness or other undesirable effects resulting from the consumption of our products or similar products by competitors, whether or not accurate, could also damage client confidence in our weight loss program and result in a decline in revenue.
Our success is also dependent on our food innovation including maintaining a robust array of food items and improving the quality of existing items. If we do not continually expand our food items or provide customers with items that are desirable in taste and quality, our business could be harmed.
Our success is also dependent on our food innovation including maintaining a robust array of food items and improving the quality of existing items. If we do not continually expand our food items or provide clients with items that are desirable in taste and quality, our business could be harmed.
As a result of such possible defects, failures, interruptions or other problems, our services and products could be rendered unreliable or be perceived as unreliable by customers, which could result in harm to our reputation and brand. Any failure of our technology or systems could result in an adverse impact on our business.
As a result of such possible defects, failures, interruptions or other problems, our services and products could be rendered unreliable or be perceived as unreliable by clients, which could result in harm to our reputation and brand. Any failure of our technology or systems could result in an adverse impact on our business.
Also, defending ourselves against such claims, regardless of their merit and ultimate outcome, may be lengthy and costly, and could adversely affect our brand image, customer loyalty and results of operations. We are dependent on our key executives for future success.
Also, defending ourselves against such claims, regardless of their merit and ultimate outcome, may be lengthy and costly, and could adversely affect our brand image, client loyalty and results of operations. We are dependent on our key executives for future success.
If our OPTA VIA coaches make improper claims regarding our products or business, or if regulators determine we are making any improper claims, this could lead to an FTC investigation and could harm our business. We continue to monitor developments to assess whether we should make any changes to our compensation structure.
If our coaches make improper claims regarding our products or business, or if regulators determine we are making any improper claims, this could lead to an FTC investigation and could harm our business. We continue to monitor developments to assess whether we should make any changes to our compensation structure.
Privacy concerns among prospective and existing customers regarding our use of such information or data collected on our website or through our services and products, such as weight management information, financial data, email addresses and home addresses, could keep them from using our website or purchasing our services or products.
Privacy concerns among prospective and existing clients regarding our use of such information or data collected on our website or through our services and products, such as weight management information, financial data, email addresses and home addresses, could keep them from using our website or purchasing our services or products.
ITEM 1A. RISK FACTORS You should consider carefully the following risks and uncertainties when reading this Report. If any of the events described below actually occur, the Company’s business, financial condition, and operating results could be materially adversely affected. You should understand that it is not possible to predict or identify all such risks and uncertainties.
ITEM 1A. RISK FACTORS You should consider carefully the following risks and uncertainties when reading this Report. If any of the events described below actually occur, the Company’s business, financial condition, and operating results could be materially adversely affected. 17 Table of Contents You should understand that it is not possible to predict or identify all such risks and uncertainties.
Our failure to develop new products and to enhance our existing products, and the failure of our products to continue to appeal to the market could have an adverse impact on our ability to attract and retain customers and thus adversely affect our business, financial condition or results of operations.
Our failure to develop new products and to enhance our existing products, and the failure of our products to continue to appeal to the market could have an adverse impact on our ability to attract and retain clients and thus adversely affect our business, financial condition or results of operations.
Use of social media may materially and adversely affect our reputation or subject us to fines or other penalties, and restrictions on the use of or access to social media may adversely impact sales of our products and services. Our business success depends on our ability to attract and retain customers.
Use of social media may materially and adversely affect our reputation or subject us to fines or other penalties, and restrictions on the use of or access to social media may adversely impact sales of our products and services. Our business success depends on our ability to attract and retain clients.
Furthermore, widespread credit card fraud may lessen our customers’ willingness to purchase our products on our website. Risks Related to Intellectual Property Third parties may infringe on our brand, trademarks and other intellectual property rights, which may have an adverse impact on our business.
Furthermore, widespread credit card fraud may lessen our clients’ willingness to purchase our products on our website. Risks Related to Intellectual Property Third parties may infringe on our brand, trademarks and other intellectual property rights, which may have an adverse impact on our business.
In addition to a negative customer experience, we could face possible seizure or recall of our products and the imposition of civil or criminal sanctions if we incorporate a defective or out-of-specification item into one of our deliveries.
In addition to a negative client experience, we could face possible seizure or recall of our products and the imposition of civil or criminal sanctions if we incorporate a defective or out-of-specification item into one of our deliveries.
Our business is subject to online security risks, including security breaches and identity theft. Unauthorized users who penetrate our information security systems could misappropriate proprietary or customer information or data or cause interruptions to the product offerings on our website.
Our business is subject to online security risks, including security breaches and identity theft. Unauthorized users who penetrate our information security systems could misappropriate proprietary or client information or data or cause interruptions to the product offerings on our website.
Risks Related to Our Industry Changes in consumer preferences could negatively impact our operating results. The weight management industry is subject to changing consumer demands based, in large part, on the efficacy and popular appeal of weight management programs.
Risks Related to Our Industry Changes in consumer preferences could negatively impact our operating results. The metabolic health and weight management industry is subject to changing consumer demands based, in large part, on the efficacy and popular appeal of weight management programs.
Additionally, remedies available in any potential administrative or regulatory actions may include product recalls and require us to refund amounts paid by all affected customers or pay other damages, which could be substantial.
Additionally, remedies available in any potential administrative or regulatory actions may include product recalls and require us to refund amounts paid by all affected clients or pay other damages, which could be substantial.
If their advertising and marketing campaigns do not generate a sufficient number of customers, our business, financial condition and results of operations will be adversely affected.
If their advertising and marketing campaigns do not generate a sufficient number of clients, our business, financial condition and results of operations will be adversely affected.
Our competitors include companies selling weight loss medications, pharmaceutical products and weight loss programs, digital tools, app-based health and wellness monitoring solutions and 17 Table of Contents wearable trackers, as well as a wide variety of diet foods and meal replacement bars and shakes, appetite suppressants and nutritional supplements.
Our competitors include companies selling metabolic health and weight loss medications, pharmaceutical products and weight loss programs, digital tools, app-based health and wellness monitoring solutions and wearable trackers, as well as a wide variety of diet foods and meal replacement bars and shakes, appetite suppressants and nutritional supplements.
We may be subject to claims that our OPTA VIA coaches are unqualified to provide proper weight loss advice. Our OPTA VIA coaches are independent contractors and, accordingly, we are not in a position to provide the same level of oversight as we would if these OPTA VIA coaches were our own employees.
We may be subject to claims that our coaches are unqualified to provide proper metabolic health and weight loss advice. Our coaches are independent contractors and, accordingly, we are not in a position to provide the same level of oversight as we would if these coaches were our own employees.
We and our OPTA VIA coaches, as well as social media influencers or other brand ambassadors that we may utilize from time to time, use email and social media platforms as a means of communicating with customers. We use digital marketing, social media, and email marketing, among other means, to attract and retain customers.
We and our coaches, as well as social media influencers or other brand ambassadors that we may utilize from time to time, use email and social media platforms as a means of communicating with clients. We use digital marketing, social media, and email marketing, among other means, to attract and retain clients.
If we lose the services of any of our key executives and we are unable to timely retain a qualified replacement, our business could be harmed. Our future success depends to a significant degree on the skills, experience and efforts of our key executives. The loss of the services of any of these individuals could harm our business.
If we lose the services of any of our key executives and we are unable to timely retain a qualified replacement, our business could be harmed. Our future success depends to a significant degree on the skills, experience and efforts of our key executives.
Further, a significant number of states require that customers be notified if a security breach results in the disclosure of their personal financial account or other information. Additional states and governmental entities are considering such “notice” laws. In addition, other public disclosure laws may require that material security breaches be reported.
Further, a significant number of states require that clients be notified if a security breach results in the disclosure of their personal financial account or other information. Additional states and governmental entities are considering such “notice” 23 Table of Contents laws. In addition, other public disclosure laws may require that material security breaches be reported.
The manufacture and sale of ingested products are subject to product liability claims and other risks. Like other manufacturers and distributors of products that are ingested, we face an inherent risk of exposure to product liability claims if the use of our products results in illness or injury.
Like other manufacturers and distributors of products that are ingested, we face an inherent risk of exposure to product liability claims if the use of our products results in illness or injury.
Our ability to attract and retain customers depends significantly on the effectiveness of our OPTA VIA coaches’ advertising and marketing practices. Our OPTA VIA coaches support our customers and market our products and services primarily through word of mouth, email and via social media 19 Table of Contents channels such as Facebook, Instagram, X, and video conferencing platforms.
Our ability to attract and retain clients depends significantly on the effectiveness of our coaches’ advertising and marketing practices. Our coaches support our clients and market our products and services primarily through word of mouth, email and via social media channels such as Facebook, Instagram, X, and video conferencing platforms.
If we experience a security breach and such notice or public disclosure is required in the future, our reputation and our business may 23 Table of Contents be harmed.
If we experience a security breach and such notice or public disclosure is required in the future, our reputation and our business may be harmed.
Competition is intense in the weight management industry and we must remain competitive in the areas of program efficacy, price, taste, customer service and brand recognition.
Competition is intense in the metabolic health and weight management industry and we must remain competitive in the areas of program efficacy, price, taste, client service and brand recognition.
We may also be subject to claims that our OPTA VIA coaches have provided inappropriate advice or have failed to recommend customers consult with their health care providers during the course of the customers’ weight loss journey, as recommended in the Company’s Medical Disclaimer.
We may also be subject to claims that our coaches have provided inappropriate advice or have failed to recommend clients consult with their health care providers during the course of the clients’ metabolic health and weight loss journey, as recommended in the Company’s Medical Disclaimer.
Similarly, the FTC continues to scrutinize multi-level marketers. All of these actions and any future scrutiny of us or the direct selling industry could generate negative publicity or further regulatory actions that could result in fines, restrict our ability to conduct our business, enter into new markets, and ultimately attract customers.
All of these actions and any future scrutiny of us or the direct selling industry could generate negative publicity or further regulatory actions that could result in fines, restrict our ability to conduct our business, enter into new markets, and ultimately attract clients.
We may be subject to claims from our customers alleging that our OPTA VIA coaches lack the qualifications necessary to provide proper advice regarding weight loss and related topics.
We may be subject to claims from our clients alleging that our coaches lack the qualifications necessary to provide proper advice regarding metabolic health, weight loss, and related topics.
If we are unable to reverse the downtrend of the number of active earning coaches, which has been declining since Q3 2022, or revenue per active earning coach, which has been declining since Q2 2023, our future revenue and operating results will continue to be adversely affected, as we believe that the success of the Company depends on the success of our OPTA VIA coaches.
If we are unable to reverse the downtrend of the number of active earning coaches, which has been declining since the first quarter of 2023, our future revenue and operating results will continue to be adversely affected, as we believe that the success of the Company depends on the success of our coaches.
Additionally, we anticipate competition from other companies that provide telehealth services associated with weight management, and certain of these competitors have greater financial and other resources than us and have operations in therapeutic or other areas where we may seek to expand in the future. The weight loss industry is subject to adverse publicity, which could harm our business.
Additionally, we anticipate competition from other companies that provide telehealth services associated with weight management, and certain of these competitors have greater financial and other resources than us and have operations in therapeutic or other areas where we may seek to expand in the future.
Such claims could result in lawsuits, damage to our reputation and divert management’s attention from our business, which would adversely affect our business. 22 Table of Contents We may be subject to health or advertising related claims from our customers.
Such claims could result in lawsuits, damage to our reputation and divert management’s attention from our business, which would adversely affect our business. 22 Table of Contents We may be subject to health or advertising related claims from our clients. We do not engage physicians or nurses to monitor the progress of our clients.
Additionally, we commit and invest substantial time and resources into developing innovative new products. There is no assurance that any new products will be successfully adopted by our customer base, or that we will be able promote such new products without taking steps such as reducing pricing or incurring acquisition costs that would affect our revenues and/or profitability.
There is no assurance that any new products, including the reformulation of our Essential line of products, will be successfully adopted by our client base, or that we will be able promote such new products without taking steps such as reducing pricing or incurring acquisition costs that would affect our revenues and/or profitability.
We are continuously evaluating changing consumer preferences and the competitive environment of our industry and seeking out opportunities to improve our performance through the implementation of selected strategic initiatives.
We may not be able to successfully implement new strategic transformation, which could adversely impact our business. We are continuously evaluating changing consumer preferences and the competitive environment of our industry and seeking out opportunities to improve our performance through the implementation of selected strategic initiatives.
Our capital allocation strategy may change from time to time, and we cannot provide any assurance that we will declare dividends in the future or in any particular amounts. The 2023 discontinuation of our dividend payments could have a negative effect on our stock price.
Our capital allocation strategy may change from time to time, and we cannot provide any assurance that we will declare dividends in the future or in any particular amounts.
Future research or investigative reports or publicity that is perceived as unfavorable or that question certain weight loss programs, products or methods could result in a decline in our revenue.
Congressional hearings about practices in the weight loss industry have also resulted in adverse publicity and a consequent decline in the revenue of weight loss businesses. Future research or investigative reports or publicity that is perceived as unfavorable or that question certain weight loss programs, products or methods could result in a decline in our revenue.
The success of our business is dependent on our ability to maintain and grow our network of OPTA VIA coaches . We consider our number of active earning OPTA VIA coaches and average quarterly revenue per active earning OPTA VIA coach to be key indicators of our financial performance and condition.
We consider our number of active earning coaches and average quarterly revenue per active earning coach to be key indicators of our financial performance and condition.
We are aware of recent civil actions against other companies in the United States that use a direct selling model, which have and may in the future result in significant legal costs. Allegations against companies that use a multi-level marketing strategy in various markets have also created intense public scrutiny of companies in the direct selling industry.
We could also be subject to challenges by private parties in civil actions. We are aware of recent civil actions against other companies in the United States that use a direct selling model, which have and may in the future result in significant legal costs.
As of December 31, 2024, the Company had 27,100 total active earning OPTA VIA coaches as compared to 30,000 as of September 30, 2024 and 41,100 as of December 31, 2023.
For the quarter ended December 31, 2025, the Company had 16,100 total active earning coaches as compared to 19,500 for the quarter ended September 30, 2025 and 27,100 for the quarter ended December 31, 2024.
A customer who experiences health problems could allege or bring a lawsuit against us on the basis that those problems were caused or worsened by participating in our programs, including outcomes based on interactions with our independent OPTA VIA coaches or healthcare providers associated with LifeMD.
Many people who are overweight suffer from other physical conditions, and our target consumers could be considered a high-risk population. A client who experiences health problems could allege or bring a lawsuit against us on the basis that those problems were caused or worsened by participating in our programs, including outcomes based on interactions with our independent coaches.
The weight loss industry receives adverse publicity from time to time, and the occurrence of such publicity could harm us, even if the adverse publicity is not directly related to us. Congressional hearings about practices in the weight loss industry have also resulted in adverse publicity and a consequent decline in the revenue of weight loss businesses.
The metabolic health and weight loss industry is subject to adverse publicity, which could harm our business. The metabolic health and weight loss industry receives adverse publicity from time to time, and the occurrence of such publicity could harm us, even if the adverse publicity is not directly related to us.
If we are required to comply with new laws or regulations or new interpretations of existing laws or regulations, or if we are unable to comply with these laws, regulations, or interpretations, our business could be adversely affected. 25 Table of Contents Future laws or regulations, including laws or regulations affecting our marketing and advertising practices, relations with consumers, employees, service providers, or our services and products, may have an adverse impact on us.
If we are required to comply with 25 Table of Contents new laws or regulations or new interpretations of existing laws or regulations, or if we are unable to comply with these laws, regulations, or interpretations, our business could be adversely affected.
Additionally, OPTA VIA coaches are subject to high turnover, and we depend on our network of OPTA VIA coaches to continually grow their businesses by supporting customers and attracting, training and motivating new OPTA VIA coaches.
Additionally, coaches are subject to high turnover, and we depend on our network of coaches to continually grow their businesses by supporting clients and attracting, training and motivating new coaches. Our failure to provide the business essentials, education, and competitive compensation necessary to motivate coaches to grow their businesses will adversely affect our future growth and operating results.
Any such regulatory action, whether or not it results in a final determination adverse to us, could create negative publicity, with detrimental effects on the motivation and recruitment of OPTA VIA coaches and, consequently, on sales. 20 Table of Contents We could also be subject to challenges by private parties in civil actions.
However, governmental regulations can delay or prevent the introduction, or require the reformulation or withdrawal, of certain of our products. Any such regulatory action, whether or not it results in a final determination adverse to us, could create negative publicity, with detrimental effects on the motivation and recruitment of coaches and, consequently, on sales.
We have not obtained life insurance on any key executives. If any key executives left us or were seriously injured and became unable to work, our business could be harmed. Information Technology and Cyber Security Risks Any failure of our technology or systems to perform satisfactorily could result in an adverse impact on our business.
Failure to retain or attract key personnel could have a material adverse effect on our business. Information Technology and Cyber Security Risks Any failure of our technology or systems to perform satisfactorily could result in an adverse impact on our business.
Our failure to provide the business essentials, education, and competitive compensation necessary to motivate OPTA VIA coaches to grow their businesses will adversely affect our future growth and operating results. The growth and sustainability of our network of OPTA VIA coaches is also subject to risks which may be outside of our control.
The growth and sustainability of our network of coaches is also subject to risks which may be outside of our control.
If these or other factors limit our ability to successfully execute our strategic initiatives, our business activities, financial condition and results of operations may be adversely affected. Our business depends on the effectiveness of our advertising and marketing programs, including the strength of the Company's and our OPTA VIA coaches’ social media presence, to attract and retain customers.
Our business depends on the effectiveness of our advertising and marketing programs, including the strength of the Company's and our coaches’ social media presence, to attract and retain clients.
Removed
Our collaboration with LifeMD may not achieve the anticipated benefits.
Added
In October 2025, in response to continuing changes in the weight management industry and market conditions, we announced our strategic transformation, focusing on holistic metabolic health. The goal of these efforts is to position our business around holistic metabolic health, with the objective of expanding our addressable market, improving long-term growth prospects, and reversing recent declines in performance.
Removed
On December 13, 2023, we announced a new strategic collaboration (the “Collaboration”) with telehealth company, LifeMD, in furtherance of our expansion into the medically supported weight loss market, and with the expectation that the Collaboration would result in various long-term benefits to both companies, including increase in revenue, customer acquisition increase, and 18 Table of Contents longer tenure in customer retention.
Added
This strategy involves significant investments in new products, programs, scientific research, marketing initiatives, and coach enablement efforts, as well as changes to how we present our value proposition to consumers and our coach community. Our future growth and revenue depend upon the effectiveness and successful implementation of our strategic transformation plan.
Removed
Achieving the anticipated benefits of the Collaboration is subject to a number of uncertainties, including whether our business and LifeMD’s business can become integrated in an effective and efficient manner.
Added
Our strategic transformation plan resulted in changes to our business operations and supply chain leadership structure. Our strategic transformation plan is expected to result in additional changes to business priorities, marketing and brand strategies, as well as increased demands on management.
Removed
Failure to achieve these anticipated benefits could result in increased costs, decreases in the amount of expected revenues generated by the Collaboration and diversion of management’s attention and energy away from ongoing business operations, which could have a material adverse effect on our business or financial results.
Added
There can be no assurance that the execution of our strategic plan will be successful or that it will be adopted by consumers or coaches at the pace or scale we expect. The metabolic health market is highly competitive and evolving rapidly, with participants ranging from pharmaceutical and medical providers to digital health platforms and consumer wellness brands.
Removed
The Collaboration’s success will depend to a substantial extent on the willingness of customers to use LifeMD’s telehealth platform. If our customers do not perceive the benefits of LifeMD’s telehealth services, or if the Collaboration does not drive customer acquisition or retention, then our market may not develop, or it may develop more slowly than we expect.
Added
If we are unable to clearly differentiate our offerings, effectively communicate our value proposition, or demonstrate meaningful outcomes relative to competing solutions, our growth initiatives may not generate the expected results. Our future financial performance and projections increasingly depend on the successful execution of our strategic transformation.
Removed
Similarly, individual and healthcare industry concerns could limit acceptance of LifeMD’s healthcare services. If any of these occur, it could have a material adverse effect on the success of the collaboration. Finally, if LifeMD terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the marketplace could be adversely affected.
Added
If demand for our metabolic health offerings does not materialize, if customer acquisition or retention does not improve, if coach engagement or productivity does not increase, or if our investments fail to produce sustainable revenue growth, our operating results, cash flows, and overall financial condition could be materially adversely affected.
Removed
Our Collaboration with LifeMD could open us up to additional risks. The Collaboration may pose a number of risks, including: LifeMD has discretion in determining the efforts and resources that they will apply; LifeMD may not perform their obligations as expected; and LifeMD may fail to comply with applicable regulatory requirements.
Added
In such circumstances, we may be required to reassess our strategy, curtail or redirect investments, or take additional actions that could negatively impact our business. 18 Table of Contents The success of our business is dependent on our ability to maintain and grow our network of coaches .
Removed
Healthcare professionals providing telehealth services have become subject to a number of lawsuits alleging malpractice and some of these lawsuits may involve large claims and significant defense costs. Through the Collaboration, it is possible that these claims could also be asserted against us or our independent OPTA VIA coaches and include us as an additional defendant.
Added
Additionally, we commit and invest substantial time and resources into developing innovative new products.
Removed
We could incur reputational harm or negative publicity in relation to an adverse event involving a LifeMD healthcare provider. Additionally, a number of laws and regulations govern anti-kickbacks, physician self-referrals, and the business of advertising, promotion, dispensing, and marketing services, products, and pharmaceuticals. These regulatory regimes are overseen by state and federal level governmental bodies, including the FDA, the U.S.
Added
Allegations against companies that use a multi-level marketing strategy in various markets have also created intense public scrutiny of companies in the direct selling industry. Similarly, the FTC continues to scrutinize multi-level marketers.
Removed
Department of Health and Human Services (“HHS”), and the FTC. Through the Collaboration, failure to comply with the laws and regulations of these governmental agencies may result in legal or other enforcement actions, including orders to cease non-compliant activities.
Added
Risks related to Artificial Intelligences The development, adoption and use of artificial intelligence (“AI”) technologies are rapidly transforming the health and wellness industry, enabling faster data analysis and automation through machine learning and predictive modeling.
Removed
There can be no assurance that we will not be subject to state, federal or foreign government actions or class action lawsuits, which could harm our business, financial condition and results of operations. We may not be able to successfully implement new strategic initiatives, which could adversely impact our business.
Added
Many of our competitors, including technology-enabled health platforms, pharmaceutical companies, and digitally native wellness providers, are investing heavily in AI-driven capabilities to enhance customer acquisition, personalization, pricing optimization, supply chain efficiency, product development, and marketing effectiveness.
Removed
The goal of these efforts is to develop and implement a comprehensive and competitive business strategy which addresses the continuing changes in the weight management industry environment and our position within the industry. For example, as the healthcare industry continues to evolve its response to the obesity epidemic, so do the requirements, both regulatory and business, for providers.
Added
If we are unable to adopt and deploy AI effectively as quickly as our competitors, it may cause us to be relatively less productive or innovative, adversely impacting our 20 Table of Contents competitiveness, our ability to effectively execute our strategic transformation and requiring additional investments that increase our costs.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe rely on software, hardware, and network systems, including cloud-based technology, that are either developed by us or licensed from or maintained by third parties to maintain operations. In the ordinary course of our business, we collect and utilize proprietary and customer information and data.
Biggest changeWe rely on software, hardware, and network systems, including cloud-based technology, that are either developed by us or licensed from or maintained by third parties to maintain operations. In the ordinary course of our business, we collect and utilize proprietary and client information and data.
We utilize systems designed to protect customer information and prevent fraudulent transactions and other security breaches. We rely on third-party software products to secure our credit card transactions. Furthermore, we maintain a process to evaluate and manage risks associated with third-party service providers.
We utilize systems designed to protect client information and prevent fraudulent transactions and other security breaches. We rely on third-party software products to secure our credit card transactions. Furthermore, we maintain a process to evaluate and manage risks associated with third-party service providers.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn May 2021, the Company entered into a lease for our product innovation research center in Owings Mills, Maryland which expires in February 2029. The Company owns a 49,000 square-foot manufacturing facility in Owings Mills, Maryland, and a 100,000 square-foot distribution facility in Ridgley, Maryland.
Biggest changeIn January 2020, the Company entered into a lease for a satellite office in Lehi, Utah, which was extended during the three months ended September 30, 2025, and expires in February 2030. In May 2021, the Company entered into a lease for our product innovation research center in Owings Mills, Maryland which expires in February 2029.
ITEM 2. PROPERTIES The Company leases office space in Baltimore, Maryland which serves as our corporate headquarters. The corporate headquarters’ lease expires in February 2026. In January 2020, the Company entered into a lease for a satellite office in Lehi, Utah, which expires in December 2026.
ITEM 2. PROPERTIES The Company leases office space in Baltimore, Maryland which serves as our corporate headquarters. The corporate headquarters’ lease expires in February 2026.
The Company has listed the Ridgely, Maryland building and land for sale, and expects to sell the land and building in 2025. The Company outsources a domestic distribution center in Haltom City, Texas and the facility lease expires January 2029. In April 2021, the Company entered into a lease for a distribution center in Havre De Grace, Maryland.
The Company outsources a domestic distribution center in Haltom City, Texas and the facility lease expires in January 2029. In April 2021, the Company entered into a lease for a distribution center in Havre De Grace, Maryland. The distribution center lease expires in August 2026.
Removed
The distribution center lease expires in August 2026.
Added
During the three months ended September 30, 2025 , the Company entered into a lease agreement for new headquarters office space in 1501 South Clinton Street, Baltimore, Maryland 21224, with a lease term of 8 years and 7 months. The lease is expected to commence in March 2026.
Added
The Company owns a 49,000 square-foot manufacturing facility in Owings Mills, Maryland, and a 100,000 square-foot distribution facility in Ridgley, Maryland. The Company continued to list the Ridgely, Maryland building and land for sale as of December 31, 2025 , and closed on the sale in February 2026.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePerformance Graph The following line graph compares the yearly percentage change in the Company’s cumulative total stockholder return (Common Stock price appreciation plus dividends, on a reinvested basis) for the last five fiscal years to that of the Standard & Poor’s 600 Consumer Staples Index and the Company’s selected peer group. 30 Table of Contents 2020 2021 2022 2023 2024 Medifast, Inc. $ 186.18 $ 203.61 $ 117.46 $ 72.43 $ 18.98 Benchmarking Peer Group 140.71 158.05 106.53 101.38 98.16 S&P 600 Consumer Staples 111.14 143.15 133.89 153.95 155.83 Medifast, Inc.
Biggest changeThe Stock Repurch ase Plan does not have an expiration date and can be modified or terminated by the Board of Directors at any time. 30 Table of Contents Performance Graph The following line graph compares the yearly percentage change in the Company’s cumulative total stockholder return (Common Stock price appreciation plus dividends, on a reinvested basis) for the last five fiscal years to that of the Standard & Poor’s 600 Consumer Staples Index and the Company’s selected peer group. 31 Table of Contents 2021 2022 2023 2024 2025 Medifast, Inc. $ 109.36 $ 63.09 $ 38.90 $ 10.20 $ 6.18 Benchmarking Peer Group 92.73 50.20 44.70 36.01 22.75 S&P 600 Consumer Staples 128.79 120.46 138.51 140.20 116.43 Medifast, Inc.
Issuer Purchases of Equity Securities The following table provides information about the Company’s repurchases of common stock for the three months ended December 31, 2024: 2024 Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2) October 1 - October 31 79 $ 19.22 — 1,323,568 November 1 - November 30 — — — 1,323,568 December 1 - December 31 — — — 1,323,568 ____________________ (1) All of the shares of the Company’s common stock reflected in this column were surrendered by employees and directors to the Company to cover minimum tax liability withholding obligations upon the exercise of stock options or the vesting of shares of restricted stock and performance-based share awards previously granted to such employees and directors.
Issuer Purchases of Equity Securities The following table provides information about the Company’s repurchases of common stock for the three months ended December 31, 2025: 2025 Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2) October 1 - October 31 — $ — — 1,323,568 November 1 - November 30 — — — 1,323,568 December 1 - December 31 — — — 1,323,568 ____________________ (1) This column includes shares of the Company’s common stock that were surrendered by employees and directors to the Company to cover minimum tax liability withholding obligations upon the exercise of stock options or the vesting of shares of restricted stock and performance-based share awards previously granted to such employees and directors, when such transactions occur.
Holders There were approximately 66 record holders of the Company’s common stock as of February 11, 2025. This number does not include beneficial owners of our securities held in the name of nominees.
Holders There were approximately 65 record holders of the Company’s common stock as of February 10, 2026. This number does not include beneficial owners of our securities held in the name of nominees.
(2) At the outset of the quarter ended December 31, 2024, there were 1,323,568 shares of the Company's common stock eligible for repurchase under the repurchase authorization dated September 16, 2014 (the "Stock Repurchase Plan"). As of December 31, 2024, there were 1,323,568 shares of the Company’s common stock eligible for repurchase under the Stock Repurchase Plan.
There were no shares repurchased to cover taxes for the quarter ended December 31, 2025. (2) At the outset of the quarter ended December 31, 2025, there were 1,323,568 shares of the Company's common stock eligible for repurchase under the repurchase authorization dated September 16, 2014 (the "Stock Repurchase Plan").
Peer Group 1-800-flowers.com McCormick & Company, Inc. B&G Foods, Inc. Nu Skin Enterprises, Inc. BellRing Brands, Inc. Spectrum Brands Holdings, Inc. Duluth Holdings Inc. The Hain Celestial Group, Inc. Edgewell Personal Care Company The Simply Good Foods Co. Etsy, Inc. Tupperware Brands Corp. Herbalife Nutrition Ltd. USANA Health Sciences, Inc. Inter Parfums, Inc. WW International, Inc.
Peer Group 1-800-flowers.com Farmer Bros. Co. B&G Foods, Inc. Nu Skin Enterprises, Inc. SunOpta, Inc. Beyond Meat, Inc. Duluth Holdings Inc. The Hain Celestial Group, Inc. Edgewell Personal Care Company The Simply Good Foods Co. Nature's Sunshine Products, Inc. USANA Health Sciences, Inc. Herbalife Nutrition Ltd. WW International, Inc. The Honest Company, Inc.
There can be no assurances as to the amount, timing or prices of repurchases, which may vary based on market conditions and other factors. The Stock Repurchase Plan does not have an expiration date and can be modified or terminated by the Board of Directors at any time.
As of December 31, 2025, there were 1,323,568 shares of the Company’s common stock eligible for repurchase under the Stock Repurchase Plan. There can be no assurances as to the amount, timing or prices of repurchases, which may vary based on market conditions and other factors.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

39 edited+8 added−27 removed9 unchanged
Biggest changeSelling, General and Administrative: Selling, general and administrative (“SG&A”) expenses were $441.7 million in 2024, a decrease of $207.7 million, or 32.0%, as compared to $649.4 million in 2023, primarily due to a $188.7 million decrease in OPTA VIA coach compensation due to lower sales volumes, a $13.8 million decrease in employee compensation, a $9.7 million decrease in credit card fees, and a $7.1 million decrease in costs for coach-related events.
Biggest changeSelling, general and administrative: Selling, general and administrative (“SG&A”) expenses were $289.4 million in 2025, a decrease of $152.3 million, or 34.5%, as compared to $441.7 million in 2024, primarily due to a $85.1 million decrease in 35 Table of Contents coach compensation due to lower sales volumes and a decrease in the number of active earning coaches, a $13.4 million decrease in company-led marketing related expenses, a $12.5 million decrease for supply chain optimization that did not recur in 2025, a $9.3 million net decrease in employee compensation resulting from the realignment of the employee base to lower revenue levels partially offset by one-time restructuring charges, a $7.5 million decrease for medically supported weight loss expenses that did not recur in 2025, and a $5.7 million decrease in coach event costs.
Shipping and handling costs incurred by the Company for the delivery of products to customers are considered a cost to fulfill the contract and are included in cost of sales in our Consolidated Statements of Operations. We expense OPTA VIA coach compensation and credit card fees during the period in which the corresponding revenue is earned.
Shipping and handling costs incurred by the Company for the delivery of products to customers are considered a cost to fulfill the contract and are included in cost of sales in our Consolidated Statements of Operations. We expense coach compensation and credit card fees during the period in which the corresponding revenue is earned.
Additionally, refer to Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for management’s discussion and analysis of financial condition and results of operations for the fiscal year 2023 compared to fiscal year 2022.
Additionally, refer to Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for management’s discussion and analysis of financial condition and results of operations for the fiscal year 2024 compared to fiscal year 2023.
Our OPTA VIA business unit accounted for all of our revenues for each the years ended 2024, 2023 and 2022. We have operated and reported as a single sales segment, OPTA VIA, since 2018.
Our OPTA VIA business unit accounted for all of our revenues for each the years ended 2025, 2024 and 2023. We have operated and reported as a single sales segment, OPTA VIA, since 2018.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 31 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Our significant accounting policies are described in Note 2 to the consolidated financial statements.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Our significant accounting policies are described in Note 2 to the consolidated financial statements.
The Company’s cash, cash equivalents and investment securities increased to $162.3 million at December 31, 2024 from $150.0 million at December 31, 2023. In December 2023, the Company’s board of directors determined to change the Company’s capital allocation priorities and discontinued the Company’s quarterly cash dividend to support investments in technology and future growth.
The Company’s cash, cash equivalents and investment securities increased to $167.3 million at December 31, 2025 from $162.3 million at December 31, 2024. In December 2023, the Company’s board of directors determined to change the Company’s capital allocation priorities and discontinued the Company’s quarterly cash dividend to support investments in technology and future growth.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the 32 Table of Contents asset.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset.
Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority.
Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority.
(b) The Company has unconditional purchase obligations primarily for inventories and outsourced information technology.
(b) The Company has unconditional purchase obligations primarily for inventories, consulting services, insurance, and outsourced information technology.
Provision for income taxes: For 2024, the Company recorded $1.7 million in income tax expense, an effective tax rate of 44.8%, as compared to $29.4 million in income tax expense and an effective tax rate of 22.8%, for 2023.
Provision for income taxes: For 2025, the Company recorded $13.0 million in income tax expense, an effective tax rate of negative 231.1%, as compared to $1.7 million in income tax expense and an effective tax rate of 44.8%, for 2024.
The $8.6 million net increase in stockholders’ equity reflects $2.1 million in net income for 2024 and $7.4 million for shared-based compensation offset by other equity transactions described in the Consolidated Statements of Changes in Stockholders’ Equity included in our consolidated financial statements included in this report.
The $11.2 million net decrease in stockholders’ equity reflects the $18.7 million net loss for 2025 and $7.6 million for shared-based compensation offset by other equity transactions described in the Consolidated Statements of Changes in Stockholders’ Equity included in our consolidated financial statements included in this report.
The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more-likely-than-not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.
Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. 33 Table of Contents The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more-likely-than-not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.
Income from operations: Income from operations in 2024 decreased $123.5 million to $2.9 million from $126.4 million in 2023 primarily as a result of decreased gross profit, partially offset by decreased SG&A expenses.
Income (loss) from operations: Income (loss) from operations in 2025 decreased $17.1 million to a $14.2 million loss from operations, compared to income from operations of $2.9 million in 2024 primarily as a result of decreased gross profit, partially offset by decreased SG&A expenses.
Income from operations as a percentage of sales decreased to 0.5% for 2024 as compared to 11.8% for 2023 due to the factors described above in the explanations for gross profit and SG&A expenses. Non-GAAP adjusted income from operations in 2024 decreased to $23.0 million from $134.0 million in 2023.
Income (loss) from operations as a percentage of sales decreased to a 3.7% loss from operations as a percentage of revenue for 2025 as compared to 0.5% income from operations as a percentage of revenue for 2024 due to the factors described above in the explanations for gross profit and SG&A expenses.
Net cash provided by operating activities decreased $123.2 million to $24.5 million for 2024 from $147.7 million for 2023 primarily as a result of a $97.3 million decrease in net income and adjustments to reconcile net income to cash provided by operating activities.
Net cash provided by operating activities decreased $17.6 million to $6.9 million for 2025 from $24.5 million for 2024 primarily as a result of a $20.8 million decrease in net income and adjustments to reconcile net income to cash provided by operating activities.
On October 30, 2024, the Company terminated its Amended Credit Agreement with Citibank, N.A. The Company had no borrowings under the Amended Credit Agreement, inclusive of the credit facility and letter of credit sublimit as of the termination date.
The Company had no borrowings under the Amended Credit Agreement, inclusive of the credit facility and letter of credit sublimit as of the termination date.
Upon the change of our Customer T&Cs, revenue is now recognized upon delivery to the shipping carrier and net of discounts, rebates, promotional adjustments, price adjustments, allocated consideration to loyalty programs, and estimated returns.
Revenue is recognized upon delivery to the shipping carrier and net of discounts, rebates, promotional adjustments, price adjustments, allocated consideration to loyalty programs, and estimated returns. Our performance obligations are satisfied at a point in time.
We reduce the transaction price for customer reward programs and certain incentive offerings including pricing arrangements, promotions, and incentives that represent variable consideration and separate performance obligations.
Options to acquire additional products at a discount can come in many forms, such as customer reward programs and incentive offerings including pricing arrangements, and promotions. We reduce the transaction price for customer reward programs and certain incentive offerings including pricing arrangements, promotions, and incentives that represent variable consideration and separate performance obligations.
The number of active earning OPTA VIA coaches decreased by approximately 34.1% to 27,100 as of December 31, 2024 from December 31, 2023, and the average revenue per active earning OPTA VIA coach was $4,391 for the quarter ended December 31, 2024.
The number of active earning coaches decreased by approximately 40.6% to 16,100 for the quarter ended December 31, 2025 from the quarter ended December 31, 2024, and the average revenue per active earning coach was increased 6.2% to $4,664 for the quarter ended December 31, 2025 from the quarter ended December 31, 2024.
We review and analyze a number of key operating and financial metrics to manage our business, including the number of active earning OPTA VIA coaches and average quarterly revenue generated per active earning OPTA VIA coach.
Our product sales accounted for approximately 96.4%, 96.8% and 97.5% of our revenues in each of 2025, 2024, and 2023, respectively. We review and analyze a number of key operating and financial metrics to manage our business, including the number of active earning coaches and average quarterly revenue generated per active earning coach.
The Company expects future cash requirements, if any, to be funded from operating cash flow and financing activities. From time to time the Company evaluates potential acquisitions that complement our business. If consummated, any such transactions may use a portion of our working capital or require the issuance of equity or debt.
In pursuing its business strategy, the Company may require additional cash for operating and investing activities. The Company expects future cash requirements, if any, to be funded from operating cash flow and financing activities. From time to time the Company evaluates potential acquisitions that complement our business.
The total number of active earning OPTA VIA coaches for the three months ended December 31, 2024 decreased to 27,100 from 41,100 for the corresponding period in 2023, a decrease of 34.1%.
The year-over-year decline in revenue was primarily driven by a decrease in the number of active earning coaches. The total number of active earning coaches for the three months ended December 31, 2025 decreased to 16,100 from 27,100 for the corresponding period in 2024, a decrease of 40.6%.
The period-over-period changes were driven by the factors described above in the explanations from operations. Non-GAAP adjusted net income was $20.2 million or $1.84 per diluted share for 2024 as compared to $105.2 million or $9.64 per diluted share for 2023. The period-over-period changes were driven by the factors described above in the Non-GAAP explanations from operations.
Net income (loss): Net loss was $18.7 million, or a loss of $1.70 per diluted share, in 2025 as compared to income of $2.1 million, or $0.19 per diluted share, in 2024. The period-over-period changes were driven by the factors described above in the explanations from operations, other income, and provision for income taxes.
The increase in the effective tax rate for 2024 as compared to 2023 was primarily driven by the 18.3% impact of state taxes and the 23.3% impact of the tax shortfall for stock compensation, partially offset by the 17.9% reduction from the impact of research and development tax credits, all of which were magnified by the near break-even pre-tax income position in the current year.
The decrease in the effective tax rate for 2025 as compared to 2024 was primarily driven by the 214.0% impact of a valuation allowance on the net deferred tax asset balance, the 34.5% impact of the tax shortfall from stock compensation, and the 23.5% impact of state taxes, partially offset by the 26.2% increase from the impact of research and development tax credits, all of which were magnified by the loss position in the current period versus the near breakeven income position in the prior year.
Contractual Obligations and Commercial Commitments The Company had the following contractual obligations with a remaining term in excess of one year as of December 31, 2024 (in thousands): 2025 2026 - 2027 2028 - 2029 Thereafter Total Operating leases (a) $ 6,462 $ 7,336 $ 2,858 $ — $ 16,656 Unconditional purchase obligations (b) 4,458 5,784 579 — 10,821 Total contractual obligations 10,920 13,120 3,437 — 27,477 ____________________ 37 Table of Contents (a) The Company has operating leases in place for leased corporate offices, warehouses, and certain equipment.
Contractual Obligations and Commercial Commitments The Company had the following contractual obligations with a remaining term in excess of one year as of December 31, 2025 (in thousands): 2026 2027 - 2028 2029 - 2030 Thereafter Total Operating leases (a) $ 4,783 $ 5,684 $ 574 $ — $ 11,041 Unconditional purchase obligations (b) 1,537 1,644 344 — 3,525 Total contractual obligations 6,320 7,328 918 — 14,566 ____________________ (a) The Company has operating leases in place for leased corporate offices, warehouses, and certain equipment.
SG&A expenses included research and development costs of $4.6 million and $4.6 million for 2024 and 2023, respectively, in connection with the development of new products and programs and clinical research activities. Non-GAAP adjusted SG&A expenses were $424.2 million for 2024, a decrease of $217.7 million, or 33.9%, as compared to $641.9 million for 2023.
SG&A expenses included research and development costs of $4.3 million and $4.6 million for 2025 and 2024, respectively, in connection with the development of new products and programs and clinical research activities.
We estimate expected returns based on historical levels and project this experience into the future. Our sales contracts may give customers the option to purchase additional products priced at a discount. Options to acquire additional products at a discount can come in many forms, such as customer reward programs and incentive offerings including pricing arrangements, and promotions.
We adjust revenues for the products expected to be returned and a liability is recognized for expected refunds to customers. We estimate expected returns based on historical levels and project this experience into the future. Our sales contracts may give customers the option to purchase additional products priced at a discount.
Our policy is to recognize interest and penalties accrued on uncertain tax positions as part of income tax expense. BACKGROUND Medifast is the 40+ year old health and wellness company known for its habit-based and coach-guided lifestyle solution OPTA VIA which provides people with a simple, yet comprehensive approach to address obesity and support a healthy life.
Our policy is to recognize interest and penalties accrued on uncertain tax positions as part of income tax expense. BACKGROUND Medifast (NYSE: MED) is the health and wellness company known for its science-backed, coach-guided lifestyle system.
Net cash used in investing activities was $26.5 million for 2024 as compared to $61.0 million for 2023. This year-over-year change resulted primarily from a $22.3 million increase in proceeds from sale and maturities of investment securities and a $13.2 million decrease in cash used in the purchase of investment securities for 2024 as compared to 2023.
This year-over-year change resulted primarily from a $54.6 million increase in proceeds from sale and maturities of investment securities partially offset by a $37.8 million increase in purchases of investment securities for 2025 as compared to 2024. 36 Table of Contents Net cash used in financing activities decreased $1.0 million to $0.6 million for 2025 from $1.5 million for 2024.
By maintaining our commitment to building capabilities in the areas that matter most to our OPTA VIA coaches and customers within the OPTA VIA channel, we believe our strong financial foundation, flexible model and variable cost structure coupled with disciplined growth initiatives position Medifast for the current environment and the future. 33 Table of Contents CONSOLIDATED RESULTS OF OPERATIONS - 2024 COMPARED TO 2023 The following table reflects our Consolidated Statements of Operations for the years ended December 31, 2024 and 2023 (in thousands, except percentages): 2024 2023 $ Change % Change Revenue $ 602,463 $ 1,072,054 $ (469,591) (43.8)% Cost of sales 157,840 296,204 (138,364) (46.7)% Gross Profit 444,623 775,850 (331,227) (42.7)% Selling, general, and administrative 441,745 649,448 (207,703) (32.0)% Income from operations 2,878 126,402 (123,524) (97.7)% Other income Interest income 4,804 2,490 2,314 92.9 % Other expense (3,895) (95) (3,800) (4,000.0)% 909 2,395 (1,486) 62.0 % Income before provision for income taxes 3,787 128,797 (125,010) (97.1)% Provision for income taxes 1,696 29,382 (27,686) (94.2)% Net income $ 2,091 $ 99,415 $ (97,324) (97.9)% % of revenue Gross Profit 73.8% 72.4% Selling, general, and administrative 73.3% 60.6% Income from Operations 0.5% 11.8% Revenue: Revenue decreased $469.6 million, or 43.8%, to $602.5 million in 2024 from $1.1 billion in 2023.
By maintaining our commitment to building capabilities in the areas that matter most to our coaches and clients within the OPTA VIA channel, we believe our strong financial foundation, flexible model and variable cost structure coupled with disciplined growth initiatives position Medifast for the current environment and the future. 34 Table of Contents CONSOLIDATED RESULTS OF OPERATIONS - 2025 COMPARED TO 2024 The following table reflects our Consolidated Statements of Operations for the years ended December 31, 2025 and 2024 (in thousands, except percentages): 2025 2024 $ Change % Change Revenue $ 385,788 $ 602,463 $ (216,675) (36.0)% Cost of sales 110,601 157,840 (47,239) (29.9)% Gross profit 275,187 444,623 (169,436) (38.1)% Selling, general, and administrative 289,400 441,745 (152,345) (34.5)% Income (loss) from operations (14,213) 2,878 (17,091) (593.8)% Other income Interest income 5,516 4,804 712 14.8 % Other income (expense) 3,058 (3,895) 6,953 178.5% 8,574 909 7,665 843.2 % Income (loss) before provision for income taxes (5,639) 3,787 (9,426) (248.9)% Provision for income taxes 13,033 1,696 11,337 668.5% Net income (loss) $ (18,672) $ 2,091 $ (20,763) (993.0)% % of revenue Gross profit 71.3% 73.8% Selling, general, and administrative 75.0% 73.3% Income (loss) from operations (3.7)% 0.5% Revenue: Revenue decreased $216.7 million, or 36.0%, to $385.8 million in 2025 from $602.5 million in 2024.
Our return policy allows for customer returns of consumable products from the time of order until 30 days following the date of receipt, and upon our authorization. We adjust revenues for the products expected to be returned and a liability is recognized for expected refunds to customers.
Revenue from products transferred to customers at a point in time accounted for substantially all of our revenue for the years ended December 31, 2025, 2024, and 2023. Our return policy allows for customer returns of consumable products from the time of order until 30 days following the date of receipt, and upon our authorization.
As a percentage of sales, SG&A expenses were 73.3% for 2024 as compared to 60.6% for 2023, primarily due to a 330 basis point increase for our company led acquisition efforts, a 330 basis point increase for loss of leverage on employee compensation, a 160 basis point increase due to loss of leverage on fixed costs, and a 200 basis point increase due to supply chain optimization efforts.
As a percentage of sales, SG&A expenses were 75.0% for 2025 as compared to 73.3% for 2024, primarily due to 340 basis points of loss of leverage on fixed costs and 300 basis points of loss of leverage on employee compensation, partially offset by a 200 basis point decrease due to supply chain optimization that did not recur in 2025, 130 basis points of reduced company-led marketing related expenses, and 120 basis points of medically supported weight loss expenses that did not recur in 2025.
Since the future costs of these endeavors are variable in nature and will be scaled at the discretion of management, we do not believe there is any significant impact on our liquidity or capital resources In pursuing its business strategy, the Company may require additional cash for operating and investing activities.
The Company’s current growth initiatives, which are focused on advancing its breakthrough science and product offerings that reverses metabolic dysfunction, are variable in nature and will be scaled at the discretion of management. We do not believe there is any significant impact on our liquidity or capital resources.
The average revenue per active earning OPTA VIA coach decreased 5.5% to $4,391 for the three months ended December 31, 2024 from $4,648 for the three months ended December 31, 2023. The decrease in the revenue per active earning OPTA VIA coach for the quarter was driven by continued pressure on customer acquisition.
The average revenue per active earning coach increased 6.2% to $4,664 for the three months ended December 31, 2025 from $4,391 for the three months ended December 31, 2024. The increase in the revenue per active earning coach for the quarter was driven by greater alignment of our network of coaches, prioritizing productive coaches and efficient coach network structures.
Net cash used in financing activities decreased $78.3 million to $1.5 million for 2024 from $79.8 million for 2023. This decrease was primarily due to a $72.3 million decrease in cash dividends paid to stockholders, a $3.6 million decrease in stock repurchases, and a $2.5 million decrease in net shares repurchased for employee taxes for 2024 as compared to 2023.
This decrease was primarily due to $0.5 million decrease in cash dividends paid to stockholders and a $0.5 million decrease in net shares repurchased for employee taxes for 2025 as compared to 2024. The Company is currently investing in new growth initiatives which have the potential to impact liquidity in future periods.
The Company accounts for sales rewards that provide the customer with a material right as a separate performance obligation of the transactions, and therefore allocates consideration between the initial sale of products and the customer reward program and incentive offering.
The Company allocates consideration between the initial sale of products and the customer reward program and incentive offering. The Company discontinued its reward program in July 2025.
We have no present understandings, commitments or agreements with respect to any material acquisitions. On April 13, 2021, the Company and certain of its subsidiaries (collectively, the “Guarantors”) entered into a credit agreement among the Company, the Guarantors, the lenders party thereto and Citibank, N.A., in its capacity as administrative agent.
If consummated, any such transactions may use a portion of our working capital or require the issuance of equity or debt. We have no present understandings, commitments or agreements with respect to any material acquisitions. On October 30, 2024, the Company terminated its Amended Credit Agreement with Citibank, N.A.
As a percentage of sales, gross profit increased 140 basis points to 73.8% for 2024 from 72.4% for 2023. 34 Table of Contents Non-GAAP adjusted gross profit was $447.2 million for 2024, a decrease of $328.6 million, or 42.4%, as compared to $775.9 million for 2023.
Gross profit: In 2025, gross profit decreased $169.4 million, or 38.1%, to $275.2 million from $444.6 million in 2024. The decrease in gross profit was primarily attributable to lower revenue. As a percentage of sales, gross profit decreased 250 basis points to 71.3% for 2025 from 73.8% for 2024 primarily driven by the loss of leverage on fixed costs.
Costs of Sales: Cost of sales decreased $138.4 million, or 46.7%, to $157.8 million in 2024 from $296.2 million in 2023. The decrease in cost of sales was primarily driven by an approximately $123.9 million decrease due to lower sales volumes, $5.3 million decrease in inventory donations, and $4.7 million of efficiencies in inventory management.
The decrease in cost of sales was primarily driven by an approximately $54.9 million decrease due to lower sales volumes and a $2.6 million decrease due to restructuring of external manufacturing agreements that did not recur in 2025, partially offset by $8.0 million of loss of leverage on fixed costs and $3.0 million of inventory reserves which are primarily related to the reformulation of the Essential product line.
Removed
Prior to a change in our Customer Terms & Conditions (Customer T&Cs) in the first quarter of 2023, revenue was recognized upon receipt by the customer and net of discounts, rebates, promotional adjustments, price adjustments, allocated consideration to loyalty programs, and estimated returns.
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Designed to help address the challenges of metabolic dysfunction, the Company’s holistic approach integrates personalized plans, scientifically developed products and a framework for habit creation — all supported by a dedicated network of independent coaches.
Removed
Revenue is recognized when control of the promised products is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for transferring those products. When determining whether the customer has obtained control of the products, we consider any future performance obligations.
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Driven to improve metabolic health through advanced science and comprehensive behavioral support, Medifast has introduced Metabolic Synchronization™, a breakthrough science that reverses metabolic dysfunction through a targeted reset of the body’s metabolism.
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A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, each performance obligation is satisfied.
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Research shows the Company’s comprehensive system activates strong and targeted fat burn to enhance metabolic health and body composition by reducing visceral fat, preserving lean mass and protecting muscle. Backed by more than 40 years of clinical heritage, Medifast continues to advance its mission of Lifelong Transformation, Making Healthy Lifestyle Second Nature.
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Our contracts have performance obligations to fulfill and deliver products from the point of sale transaction along with the related customer reward programs. Our performance obligations are satisfied at a point in time.
Added
The number of active earning coaches has been trending downward year-over-year since the first quarter of 2023. The decrease in the number of active earning coaches was driven by continued pressure with client acquisition reflecting broader challenges in the operating environment, including rapid adoption of GLP-1 medications for weight loss.
Removed
Revenue from products transferred to customers at a point in time accounted for substantially all of our revenue for the years ended December 31, 2024, 2023, and 2022. Revenue on these contracts is recognized when the obligations under the terms of the contract with our customer are satisfied.
Added
Costs of sales: Cost of sales decreased $47.2 million, or 29.9%, to $110.6 million in 2025 from $157.8 million in 2024.
Removed
Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Added
Other income: Other income was $8.6 million in 2025, an increase of $7.7 million, as compared to other income of $0.9 million for the corresponding period in 2024 primarily attributable to the change in the market value of the Company's investment in LifeMD common stock. The Company sold its investment in LifeMD during the quarter ended June 30, 2025.
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OPTA VIA provides unparalleled coaching support along with community, tailored nutrition and healthy habits and empowers people to master their weight loss journey through each stage of life. Through the company’s collaboration with national virtual primary care provider LifeMD® and its affiliated medical group, customers now have access to GLP-1 medications where clinically appropriate.
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Liquidity and Capital Resources The Company had stockholders’ equity of $198.9 million and working capital of $158.7 million at December 31, 2025 compared with $210.1 million and $150.2 million at December 31, 2024.
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The Company continues to innovate and build upon its scientific and clinical heritage to fulfill its mission of offering the world Lifelong Transformation, Making a Healthy Lifestyle Second Nature. Our product sales accounted for approximately 96.8%, 97.5% and 97.2% of our revenues in each of 2024, 2023, and 2022, respectively.
Added
Net cash used in investing activities was $7.9 million for 2025 as compared to $26.5 million for 2024.
Removed
The year-over-year decline in revenue was primarily driven by a decrease in the number of active earning OPTA VIA coaches and lower coach productivity, and a $9.1 million impact from a timing difference related to changes in the Company’s sales order terms and conditions with its customers realized in the first quarter of 2023.
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Non-GAAP adjusted cost of sales were $155.3 million for 2024, a decrease of $140.9 million, or 47.6%, as compared to $296.2 million for 2023. Non-GAAP adjusted cost of sales excludes expenses in connection with the restructuring of certain external manufacturing agreements.
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Refer to the section titled “Non-GAAP Financial Measures” below for a reconciliation of each of Non-GAAP financial measures to its most comparable GAAP financial measure. Gross Profit: In 2024, gross profit decreased $331.2 million, or 42.7%, to $444.6 million from $775.9 million in 2023. The decrease in gross profit was primarily attributable to lower revenue.
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Refer to the section titled “Non-GAAP Financial Measures” below for a reconciliation of each of Non-GAAP financial measures to its most comparable GAAP financial measure.
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These decreases are partially offset by $22.9 million of customer led acquisition costs and $12.5 million of supply chain optimization costs.
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Non-GAAP adjusted SG&A expenses exclude expenses in connection with the Company's supply chain optimization and costs for the LifeMD Collaboration. Refer to the section titled “Non-GAAP Financial Measures” below for a reconciliation of each of Non-GAAP financial measures to its most comparable GAAP financial measure.
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Refer to the section titled “Non-GAAP Financial Measures” below for a reconciliation of each of Non-GAAP financial measures to its most comparable GAAP financial measure.
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Non-GAAP adjusted income tax provision was $7.7 million for 2024, an effective tax rate of 27.7%, compared to $31.1 million in 2023, an effective tax rate of 22.8%.
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The increase in the effective tax rate for 2024 as compared to 2023 was primarily driven by the 4.6% impact of state taxes and the 3.1% impact of the tax shortfall for stock compensation, partially offset by a 1.7% reduction from the impact of research and development tax credits and 1.2% from the impact of from the limitation for executive compensation.
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Refer to the section titled “Non-GAAP Financial Measures” below for a reconciliation of each of Non-GAAP financial measures to its most comparable GAAP financial measure. Net income: Net income was $2.1 million, or $0.19 per diluted share, in 2024 as compared to $99.4 million, or $9.10 per diluted share, in 2023.
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Refer to the section titled “Non-GAAP Financial Measures” below for a reconciliation of each of Non-GAAP financial measures to its most comparable GAAP financial measure.
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Non-GAAP Financial Measures 35 Table of Contents In an effort to provide investors with additional information regarding our results as determined by GAAP, we disclose various non-GAAP financial measures in this annual report, our quarterly earnings press release, and other public disclosures.
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The following GAAP financial measures have been presented on an as-adjusted basis: cost of sales, gross profit, SG&A expenses, income from operations, other income, provision for income taxes, net income, and diluted earnings per share.
Removed
Each of these as-adjusted financial measures excludes the impact of certain amounts related to supply chain optimization and restructuring of external manufacturing agreements, unrealized gains or losses on our investment in LifeMD common stock, and the LifeMD collaboration as further identified below and have not been calculated in accordance with GAAP.
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A reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure is included below. These non-GAAP financial measures are not intended to replace GAAP financial measures. We use these non-GAAP financial measures internally to evaluate and manage the Company’s operations because we believe they provide useful supplemental information regarding the Company’s on-going economic performance.
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We have chosen to provide this information to investors to enable them to perform more meaningful comparisons of operating results and as a means to emphasize the results of on-going operations.
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The following tables reconcile the non-GAAP financial measures included in this report (in thousands, except per share amounts): Year Ended December 31, 2024 GAAP Supply Chain Optimization and Restructuring of External Manufacturing Agreements Unrealized Loss on Investment in LifeMD Common Stock LifeMD Collaboration Costs Non-GAAP Cost of sales $ 157,840 $ (2,579) $ — $ — $ 155,261 Gross profit 444,623 2,579 — — 447,202 Selling, general, and administrative 441,745 (12,502) — (5,000) 424,243 Income from operations 2,878 15,081 — 5,000 22,959 Other income 909 — 4,089 — 4,998 Provision for income taxes 1,696 3,770 1,022 1,250 7,738 Net income 2,091 11,311 3,067 3,750 20,219 Diluted earnings per share (1) 0.19 1.03 0.28 0.34 1.84 Year Ended December 31, 2023 GAAP IT and Supply Chain Optimization LifeMD Collaboration Costs Non-GAAP Cost of sales $ 296,204 $ — $ — $ 296,204 Gross profit 775,850 — — 775,850 Selling, general, and administrative 649,448 (2,555) (5,000) 641,893 Income from operations 126,402 2,555 5,000 133,957 Other income 2,395 — — 2,395 Provision for income taxes 29,382 583 1,141 31,106 Net income 99,415 1,972 3,859 105,246 Diluted earnings per share (1) 9.10 0.18 0.35 9.64 (1) The weighted-average diluted shares outstanding used in the calculation of these non-GAAP financial measures are the same as the weighted-average shares outstanding used in the calculation of the reported per share amounts. 36 Table of Contents Liquidity and Capital Resources The Company had stockholders’ equity of $210.1 million and working capital of $150.2 million at December 31, 2024 compared with $201.5 million and $131.7 million at December 31, 2023.
Removed
The Company is currently investing in new growth initiatives which have the potential to impact liquidity in future periods. The Company’s current growth initiatives, which are primarily comprised of Company-led marketing activities, new product development and the Company’s Medically Supported Weight Loss collaboration with LifeMD, do not require any material contractual commitments or capital expenditures in future periods.
Removed
On May 31, 2022, the Credit Agreement was amended to increase the borrowing capacity and convert the interest rate to be based on SOFR, from LIBOR (the “Amended Credit Agreement”). The Amended Credit Agreement provided for a $225.0 million senior secured revolving credit facility with a $20.0 million letter of credit sublimit.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−1 removed3 unchanged
Biggest changeThere were no material changes in the Company's market risk exposure related to changes in interest rates and market pricing impacting our investments from the year ended December 31, 2023. The Company is exposed to market risk related to price fluctuations in equity markets related to its investment in LifeMD common stock, purchased in December of 2023.
Biggest changePrior to the quarter ended June 30, 2025, the Company was exposed to market risk related to price fluctuations in equity markets related to its investment in LifeMD common stock, purchased in December of 2023. The Company sold its investment in LifeMD during the quarter ended June 30, 2025.
If market interest rates were to increase and market pricing were to decrease immediately and uniformly by 10% from levels at December 31, 2024, the Company estimates that the fair value of its investment portfolio would decline by an immaterial amount and therefore it would not expect its operating results or cash flows to be affected to any significant degree by the effect of a change in market conditions on our investments.
If market interest rates were to increase and market pricing were to decrease immediately and uniformly by 10% from levels at December 31, 2025, the Company estimates that the fair value of its investment portfolio would decline by an immaterial amount and therefore it would not expect its operating results or cash flows to be affected to any significant degree by the effect of a change in market conditions on our investments.
There were no material changes in the Company's market risk exposure related to the investment in LifeMD common stock from the year ended December 31, 2023. 38 Table of Contents
Other than the sale of LifeMD common stock, there have been no other material changes to our market risk exposure since December 31, 2024. 37 Table of Contents
Removed
If equity prices were to decrease immediately and uniformly by 10% from levels at December 31, 2024, the Company estimates that the fair value of the Company investment would decline by an immaterial amount and therefore it would not expect its operating results or cash flows to be affected by any significant degree by the effect of a change in market conditions on our investment.

Other MED 10-K year-over-year comparisons